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Rupee gains 37 paise against dollar

The rupee gained sharply by about 37 paise against the US dollar and closed below 39 level to Rs 38.92-94 after touching 's day's high of 38.84-88 per dollar in a stable trading session at the interbank foreign exchange market in Bombay today.

The rupee opened at Rs 39.19-24. It strengthened to Rs 38.95-39.05 on routine business demand. Later, news of the dissolution of Lok Sabha improved the Indian unit further to Rs 38.84-88 as the decision was expected by the marketmen, dealers said. The rupee finally closed the rupee at Rs 38.92-94, netting a gain of 37-40 paise over the previous close of Rs 39.30-34 per US unit.

Leading forex dealers attributed the rupee's gain to the slack dollar demand from market players and the Reserve Bank of India's measures to cool down the market sentiments. Most of the market players have adopted 'wait and watch attitude' in view of the scheduled RBI meeting with banks, they said.

Cash tom closed at 2.75-3 paise premium, tom spot at 2.5-3 premium and cash tom at 0.25-0.5 paisa premium.

The monthly forwards (in paise) were 22-23 for December, 49-50 for January, 72-74 for February, 97-99 for March, 118-120 for April, 137-139 for May and 155-157 for June. The six-month annualised premia closed at 7.24 per cent.

According to dealers, the demand for US dollars from banks and corporates was normal and not heavy.

The overseas market was reportedly quiet with little movements in major currencies. The pound sterling opened at Rs 65.70 and ended at Rs 65.34, the yen closed at Rs 30.10 (per 100 yen) and mark at 21.95.

Elsewhere, the RBI fixed the reference rate at Rs 39.01 per US dollar.

UNI