Date:22/07/2004 URL: http://www.thehindubusinessline.com/2004/07/22/stories/2004072201910800.htm

Back Rupee tad weaker

Our Bureau

MUMBAI: The rupee closed marginally weaker at 46.13/14 against the greenback on Wednesday, as against Tuesday's close of 46.10/12.

``The positive news on the transaction tax front did not help the rupee substantially in spite of the fact that lately it has been taking cue from the stock market ", said a dealer with a private sector bank.

Overnight, the euro weakened overseas against the greenback; this coupled with buying of greenback in the early hours in the domestic market led to the rupee weakening to 46.19, said dealers.

Selling interest was witnessed after these levels, which pulled up the domestic currency to 46.03. Dollars were sold on behalf of few corporate heavyweights with both public sector and foreign banks, they added.

"The rupee is experiencing a good resistance at 46.20 levels", said a senior dealer with a private sector bank. "The arbitrage in the non deliverable forwards (NDF) market is to the tune of 13-14 paise for one month forward dollar; this is the factor inducing buying of the greenback", he added. Market participants expect the domestic currency to recover tomorrow, unless the euro shows further signs of weakening.

The forwards opened bullish but closed lower. The six-month forward closed at 1.96 per cent and the one-year forward closed at 1.60 per cent (1.75 per cent).