Rupee loses fresh ground

MUMBAI MAY 9. The rupee lost fresh ground against the U.S. currency today due to renewed dollar demand from public sector banks in generally thin and listless trade at the interbank foreign exchange market.

Relinquishing most of its overnight gains, the rupee closed at Rs. 48.9625/9675 a dollar, lower from Tuesday's finish of Rs. 48.94/95 after state-owned banks steadily mopped up dollars from the market.

It opened cautiously weak at 48.96/97 and moved in a tight range of 48.9600 and 48.9750.

Despite adequate dollar supplies from export remittances, the rupee met with renewed pressure owing to steady dollar demand from state-owned banks. However, the forex spot trade remained quiet and range-bound due to lack of market-moving factors, dealers said.

State-run banks were buying dollars on behalf of the central bank to prevent the rupee from rising sharply in order to give a competitive edge to exporters, they added.

``The central bank would like the rupee to trade in a band of 48.94-48.98 and any sharp upward tick invites dollar selling intervention through state-run banks.

It is the preferred range for the time being which the apex bank would want to maintain,'' a dealer commented.


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