Rupee recovers modest ground

MUMBAI FEB. 15. The rupee recovered moderate ground against the U.S. currency today, rallying smartly from early intraday low, backed by fresh exporter dollar sales and late unwinding of long positions by banks ahead of the weekend.

In fairly choppy two-way trading at the interbank foreign exchange market, the rupee closed at 48.6700/6750 a dollar, a two paise gain from Thursday's finish of 48.6900/6950 after an early dip to 48.71/72. It opened at 48.6850/6950.

The rupee had depreciated by around three paise in the last two sessions, driven-down by steady dollar demand from public sector banks.

A spillover of overnight dollar short-covering by State-run banks pushed down the rupee to early intraday low of 48.71/72. But, around these levels there was strong resistance after exporter dollar supplies hit the market, leading to offloading of long dollar positions by banks, allowing the rupee to bounce back smartly, dealers said.

"Many State-owned banks that had gone long on the dollar in the morning, liquidated their holdings to keep positions square to avoid the high weekend carryover costs," a dealer said, adding "no body wants to be caught rather long on the dollar in the current comfortable forex situation". State-run banks were mopping up dollars from the market to prevent the rupee from rising sharply.


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