Rupee closes 16 paise up against dollar.

MUMBAI: Extending gains for the fifth straight session, the Indian rupee today shot up by 16 paise against the dollar on the back of exporters and banks selling the American currency.

At the Interbank Foreign Exchange (Forex) market, the domestic unit opened strong at 44.95/96 a dollar against weekend's close of 45.10/11. It immediately touched the day's high of 44.7950.

Dealers attributed initial rise in the rupee value to firm local equities where the benchmark Sensex was up by nearly 251 points.

They added that continued portfolio inflows too helped the rupee notch up smart gains. Foreign Institutional Investors have pumped in $638.10 million in equities last week, taking their total exposure to a record $29.49 billion so far in 2010.

Dealers said exporters and some banks were seen selling dollars on the back of heavy capital inflows.

Strong dollar overseas and some dollar demand at the fag end from importers, mainly oil refiners, later weighed on the rupee which fell back to a low of 45.04 before ending at 44.94/95.

The dollar index was up by about 0.7 per cent against a basket of currencies in European trade today.

Late sell-off in equities too put pressure on the rupee. The Sensex pared most of the early gains and ended better by 14.38 points or 0.07 per cent only.

Global crude oil was trading below USD 89 a barrel in London today, after touching two-year high on last Friday.

The rupee premium for the forward dollar continued its upward march on sustained paying pressure from banks and corporates. The benchmark six-month forward dollar premium payable in May finished higher at 135-137-1/2 paise from 131-1/2-133 paise on last Friday.

Far-forward contracts maturing in November to improved to 233-1/2-235-1/2 paise from 225-227 paise previously.

The Reserve Bank of India has fixed the reference rate for the dollar at Rs 44.85 and the euro at Rs 59.92.

The rupee rose further to Rs 70.38/40 against the pound sterling from last weekend's close of Rs 70.59/61 and also firmed up to Rs 59.57/59 per euro from Rs 59.77/79 previously.

It, however, declined against the yen to Rs 54.23/25 per 100 yen from its last close of Rs 53.93/95.

Source : timesofindia.indiatimes.com