Re ends high on $ sales

MONEY MARKET ROUND-UP

The rupee ended firm today on strong dollar sales by foreign institutional investors, but the dollar demand from Reserve Bank of India prevented the Indian unit from rising sharply.

The rupee ended at 40.37 per $1, four paise higher from 40.41 per $1 on Monday.

The 1.6 per cent rise in Bombay Stock Exchange's Sensex earlier today augured well for the rupee, as it led to expectations that foreign funds will continue to invest here.

However, local stocks shed gains to end 0.3 per cent down, after rising for straight sessions.

The dollar's weakness overseas also lifted the rupee.

The dollar was at 123 yen per $1, compared with 123.37 yen on Monday, while against the euro, it was at $1.3654 from $1.3622.

The rupee was unable to advance significantly as Reserve Bank of India persistently bought dollars around 40.37-40.39 levels, dealers said.

"The rupee is holding rock steady at the 40.40 level. The more time it spends in this range, more significant will be the break out. Market players are waiting on the sidelines and would eagerly jump into the breakout direction," said a note by Prime Forex Consultants.

FORWARD MARKET
Premiums ended down on forward dollar sales because of ample liquidity.

The one-year premium ended at 1.81 per cent annualised, marginally down when compared with 1.83 per cent on Monday. Exporters also sold dollars, noting there was no significant demand to counter the supply other than RBI's purchases.

However, some importers booked profits in the far-end tenures, which averted a big fall in premiums.