rediff.com
rediff.com
Money Find/Feedback/Site Index
      HOME | MONEY | REUTERS | REPORT
July 24, 2000

BUDGET 2000
SPECIALS
INTERVIEWS
COMMENTARY
GOVT&ECONOMY
Y2K: BIZ FEATURES
INDIA & THE WTO
CREDIT POLICY
BIZ IN THE USA
CARS & MOBIKES
MANAGEMENT
CASE STUDY
BIZ-QUIZ
USEFUL INFO
ARCHIVES
NEWSLINKS
SEARCH REDIFF
Search Rediff

Rupee stable, imports check further gains

E-Mail this report to a friend

The Indian rupee was stable and close d in a firmer range on Monday, steadied by the central bank's monetary measures amid continuing light import demand for dollars, dealers said.

The rupee closed at 44.73/75 per dollar at 2:45 p.m.

It had opened at 44.70/75, sharply firmer than Friday's close at a record low of 45.025/03.

"Underlying demand for dollars is intact, and that is keeping it (the dollar) supported at 44.70 level," a dealer with a foreign bank said.

"But the action has now moved to the forwards too. Many importers are hedging near-term payables."

A large private sector firm was the main dollar buyer, dealers said.

The Reserve Bank of India caught the markets by surprise late on Friday with several monetary tightening measures on Friday, aimed at protecting the rupee which had slipped close to a per cent in two weeks until Friday.

It hiked banks' cash reserve ratio (CRR) by 50 basis points to 8.5 per cent in two stages, and the bank rate by one percentage point to 8.0 per cent.

The central bank also reduced limits available to banks for refinance facilities by 50 per cent.

Foreign funds had been heavy dollar buyers last week, converting their equity sales to dollars. They have so far sold $305 million worth equities in July.

Dealers said besides import paying, the prospect of tighter money market liquidity was keeping dollar premiums bid.

The RBI's measures will absorb nearly Rs 43 billion from the money market in the first stage of measures that take effect at the end of this week.

And on Monday, Rs 50 billion were drained out through the daily repo auction at which the RBI set a cut-off of 8 per cent.

The six-month forward premium was up at an annualised 4.76 per cent compared with Friday's 3.79 per cent.

Back to top
(c) Copyright 2000 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.Reuters

Tell us what you think of this report

HOME | NEWS | MONEY | SPORTS | MOVIES | CHAT | INFOTECH | TRAVEL
SINGLES | NEWSLINKS | BOOK SHOP | MUSIC SHOP | GIFT SHOP | HOTEL BOOKINGS
AIR/RAIL | WEATHER | MILLENNIUM | BROADBAND | E-CARDS | EDUCATION
HOMEPAGES | FREE EMAIL | CONTESTS | FEEDBACK