Rupee Bounces Back by 32 Paise to 59.35

MUMBAI: The rupee snapped two days of losses and appreciated by 32 paise on Friday to close at 59.35 against the dollar as the US currency weakened overseas and traders wound up positions at the end of the week.

The rupee was also helped by fresh dollar sales by exporters and some banks and around Rs 250 crore capital inflows in stocks.

At the interbank foreign exchange market, the rupee resumed lower at 59.72 a dollar from the previous close of 59.67 and declined to a low of 59.88. It bounced back on dollar selling by exporters and some banks, touching a high of 59.30 before settling at 59.35, a rise of 0.54 per cent.

The rupee was also supported by comments from Prime Minister Manmohan Singh, who indicated the RBI's measures to curb exchange rate volatility by tightening liquidity may be reversed.

"These steps are designed to contain speculative pressure on currency. Once these short-term pressures have been contained, as I expect they will be, the Reserve Bank can even consider reversing these pressures," Singh said at the annual meeting of Assocham.

The benchmark S&P BSE sensex gained 21 points, or 0.11 per cent. FIIs sold shares worth Rs 178.30 crore yesterday as per provisional data with the stock exchanges.

The dollar index was down 0.17 per cent. "Dollar demand from companies and importers kept the rupee under pressure," said Pramit Brahmbhatt, CEO, Alpari Financial Services (India). "Today being the last day of the week, most of the traders prefer to square up their open positions, which helped the rupee to eventually appreciate."

Forward dollar premiums recovered on fresh payments from banks and corporates.

The benchmark six-month forward dollar premium payable in December finished higher at 203-206 paise from Thursday's close of 197-1/2-202-1/2 paise. Far-forward contracts maturing in June firmed up to 408-411 paise from 399-404 paise.

The RBI fixed the reference rate for the dollar at 59.7950 and for the euro at 78.5222.

The rupee recouped slightly against the pound sterling to 90.62 from 90.75 previously and rebounded against the euro to 77.93 from 78.18.

It rose against the Japanese yen at 59.20 per 100 yen from 59.61.