Monday, July 21, 2008

Rupee Appreciates Due To Easing Of Oil Prices - July 21, 2008

The rupee gained against the US dollar on July 18 thanks to the easing of crude oil prices in the global market and gains made by the domestic equity market. The currency opened higher at 42.71/73 and closed at 42.75/76, against the previous close of 42.81/82. During the day, it moved in a range of 20 paise.

Oil was around $130 for a barrel, which helped improve sentiment in the spot rupee market. The upswing in the stock market, which gained by 523 points on Friday, also aided the rupee, said a dealer with a private bank. The companies having the option of buying dollars from the Reserve Bank of India, through the special open market operations, has to some extent taken off the artificial pressure from the spot market. Market participants said that the Reserve Bank of India would keep the monetary policy tight since inflation remains high and earlier inflation figures are being revised upwards by 60-70 basis points.The rupee could remain in the range of 42.80-43.10 next week. In the forward market, the 6-month premium closed higher at 5.07 per cent (4.78) and the 12-month ended at 4.30 per cent (4.14).

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