Date:29/08/2006 URL: http://www.thehindubusinessline.com/2006/08/29/stories/2006082903740600.htm

Back Re gains against dollar

Our Bureau

Mumbai, Aug. 28

The rupee gained against the greenback due to dollar selling by some foreign banks, leading to depreciation in the value of the US currency, said a dealer at a private bank. The home currency opened at 46.57, but recovered to close at 46.50/51, higher than Friday's close at 46.57. "There was selling interest in the market by many foreign banks, which helped the rupee strengthen from 46.57 to 46.51," the dealer said. Dealers also said that supply of dollars was more than the demand. "Yen weakened against the dollar because of speculations that Japan may not have an interest rate hike," he said. "The rupee also tracked the euro's movement, which strengthened against the dollar," he added.

The rupee is expected to weaken in the coming days due to the month end demand for dollars from importers, said the dealer. In the forward-premia market, the six-month premium ended at 1.36 per cent (1.31 per cent) and the 12-month premium at 1.32 per cent (1.29 per cent).