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Tuesday, May 23, 2006

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Rupee volatile against dollar

Our Bureau

Mumbai, May 22

The rupee was volatile against the dollar tracking the tremors on the domestic stock market. The rupee opened weaker at 45.69/72, lower than Friday's close at 45.56/57. It then dipped to an intra-day low of 45.82 but recovered to end at 45.57. Dealers said that the rupee opened weak in expectation of a fall in the stock market. There was all-round dollar demand from FIIs, importers as well inter-bank traders. However, selling of dollars by RBI through PSU banks as well as the appreciation of the other major currencies against the greenback helped the rupee to firm up. "The rupee is mirroring the volatility of short-term events like the fall in the stock market. The currency is displaying an underlying trend of weakness and is likely to stay in the range of 45.40-46 in the coming days," said Mr V. Rajagopal, Chief Dealer-Forex, Kotak Mahindra Bank. Dealers also said that month-end could cause the rupee to weaken further. In the forward premia market, the 12-month closed at 1.17 per cent (1.10) and the 6 month ended at 1.10 per cent (1.04).

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