Date:08/07/2008 URL: http://www.thehindubusinessline.com/2008/07/08/stories/2008070851890600.htm

Back Rupee closes lower

Mumbai, July 7

The rupee closed about 30 paise lower against the dollar on Monday in a market that saw choppy movement, due to a lack of dollar supply and also because traders took advantage of the arbitrage between the dollar's value in the spot and in the overseas nondeliverable forward (NDF) market. There is a difference of about 20-25 paise between the prices of the dollar in the spot and the NDF market, said dealers. The rupee opened at 43.13/ 15 and touched a high of 43.09/10, before closing at 43.29/30, against the previous close of 43.15/16. Towards the end of day, ICICI Bank sold dollars, said a forex dealer. Another dealer with a private bank said that nationalised banks were seen selling dollars when the rupee was around 43.30, perhaps on the instruction of the RBI. "It is difficult to predict the rupee's movement, because it seems the central bank is selling dollars to support the rupee. But the rupee may remain in the range of 43.15- 43.30," said the dealer. The forward premia eased, with the six-month closing at 4.52 per cent (4.50 per cent) and the 12-month at 3.95 per cent (4.01 per cent). - Our Bureau