Rupee At 39.34 Against US Dollar

The rupee surrendered its early gains and showed some signs of weakness before closing at 39.34/35 against the US currency following sluggish Asian stock markets and slow down in capital inflows. In fairly active trade at the Interbank Foreign Exchange (Forex) market, the domestic unit opened strong at 39.26/28 per dollar against the Friday''s close of 39.32/33 a dollar on the back of initial firmness in equity markets where the Sensex was up by nearly 273 points.

The currency, however, failed to maintain higher levels on expectations of dollar buying by the central bank as well as negative turnaround in equity markets, forex dealers said. Later the Sensex closed the day down by 65 points in line with bearishness in Asian stock markets. The central bank also believed to be buying dollars to stem the rise in the rupee to protect exporters'' competitiveness.There was some dollar buying by importers, including oil refiners, to meet their import requirements as the global crude oil prices remained high above $94 a barrel.