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Rupee bounces off 1-week lows as markets gain

Rupee bounces off 1-week lows as markets gain
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First Published: Wed, Mar 25 2009. 06 26 PM IST
Updated: Wed, Mar 25 2009. 06 26 PM IST
Mumbai: The rupee rebounded from one-week lows on Wednesday on late gains in the domestic share market and dollar sales by exporters, but month-end demand for the US unit capped a sharp rise.
The partially convertible rupee closed at Rs50.74/75 per dollar, off a low of Rs51.10, which was its weakest since 19 March, and little changed from its previous close of Rs50.73/74.
“Trading was very choppy today, exporters were selling dollars above 50.80 levels, while gains in the share market helped. Rally in the Korean won also improved sentiment,” a senior dealer with a foreign bank said.
The South Korean won hit a two-month high of 1,357.9 per dollar, bucking regional weakness as investors who were long on US dollars rushed to dump the currency on stop-losses.
Indian shares rallied 2.1% to their highest close since early January, taking their gains to 20% from a 2009 low hit on 6 March.
Foreign investors have been net buyers of nearly $550 million worth of shares in the eight sessions to Tuesday, helping trim their net sales in 2009 to $1.7 billion.
That buying has helped the rupee climb 2.9% from a record low of Rs52.2 touched earlier this month.
Dealers said month-end dollar demand from importers and oil refiners kept pressure on the rupee.
Oil is India’s biggest import and refiners are the largest buyers of dollars in the domestic currency market, with their demand tending to peak at the end of each month, when they make payments for their imports.
One-month offshore non-deliverable forward contracts were at Rs51.20/30, weaker than the onshore spot rate.
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First Published: Wed, Mar 25 2009. 06 26 PM IST
More Topics: Rupee | Currency | Money | Dollar | Markets |