Rupee Up On RBI Decision - June 3, 2008

The rupee appreciated against the dollar on June 2 on news that the Reserve Bank of India will provide liquidity to oil companies through the special open market operations. On May 30, the RBI announced that it would provide foreign currency to oil companies through public sector banks. On June 2, the rupee opened higher against the dollar, at 42.19/20 and touched a high of 42.15. But the gains made in the earlier part of the day were lost when the rupee started falling in tandem with the domestic equity index, said a bond dealer with a private bank. The rupee ended the day at 42.41/42, 20 paise higher from the previous close of 42.61/62. The forward premia came off their previous high with the six month closing at 1.69 per cent (2.26 per cent) and the one-year closing at 1.48 per cent (1.76 per cent).