Rupee up as banks cut long dollar positions

Rupee up as banks cut long dollar positions
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First Published: Mon, May 05 2008. 11 42 AM IST
Updated: Mon, May 05 2008. 11 42 AM IST
Mumbai: The Indian rupee rose on Monday, 5 May, as banks unwound long dollar positions and exporters sold the greenback to cash in at current levels, dealers said.
At 10:40am (0510 GMT), the partially convertible rupee was at 40.54/55 per dollar, about 0.25% higher from Friday’s close of 40.64/65.
“Mostly, I expect the currency to remain strong as inflows are buoyant,” the trading head at a state-run bank said.
The rupee touched an intraday low of 40.78 on Friday due to heavy dollar demand from oil firms and gold traders. Traders said the rupee’s steep fall had triggered frantic dollar buying by a few banks.
“These positions are getting liquidated today. Plus, we expect dollar sales by exporters,” the trader said.
Traders also eyed local share prices to gauge likely foreign capital inflows in days ahead. India’s main share index traded higher on Monday, after climbing 1.8% in the previous session.
A US rate cut last week may spur more inflows into local equities, dealers said. The Fed lowered its benchmark federal funds rate by 25 basis points to 2% on 30 April.
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First Published: Mon, May 05 2008. 11 42 AM IST