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Rupee loses 20 paise to dollar

The Indian rupee weakened by 20 paise against US dollar on good dollar demand from corporate sectors and banks in a volatile trading at the interbank foreign exchange market in bombay today.

The dollar opened higher at Rs 39.31-335 as against its previous close of Rs 39.22-24, due to heavy covering by the corporate sectors and buying interest shown by the State Bank of India depreciated the rupee to Rs 39.38-41, during intraday trading.

At the level of Rs 39.40, the SBI sold nominal amount of dollars that appreciated the Indian currency to Rs 39.37 per dollar, dealers said.

Another dealer said that continued demand for dollar and reduction in the export credit interest by the Reserve Bank of India weakened the Indian rupee. Finally, the market closed at Rs 39.41-44.

Meanwhile, the RBI fixed the reference rate for the dollar at Rs 39.38 as against its previous close of Rs 39.26.

The central bank intervened in near forward and far forward level. The apex bank was seen receiving sizeable amount of dollars for April, May, June and July month. The cash to spot dollar was quoted at 0.5-0.75 paise premium, spot/Jan dollar was traded at 14-16 paise premium, spot/Feb at 39-41 paise premium and spot/June dollar was traded between 139.00 and 142.00 paise premium.

Being the first of trading after the long holidays' of Christmas and New Year, the overseas market witnessed volatile activity, dealers added. The dollar strengthened against most of the major currencies. The sterling opened at Rs 64.60 before closing at Rs 64.73, mark traded at Rs 21.60 and yen traded between Rs 29.73 and at 29.60 (per 100).

A moderate amount of import covering was carried on in near forward and far forwards and nominal amount of export booking was done in cash and spot basis.

UNI