Re rises again, ends below 48

MONEY MARKET ROUND-UP

Rupee rose reversing early losses as banks sold the greenback noting the turnaround in the local share market movement, dealers said.

The Indian unit ended up Rs 47.72 per dollar, a three-week high compared with Rs 48.58 per dollar on Monday. Rupee moved in an over one rupee range on Tuesday.

In the last few days, the rupee has risen about 3.6 per cent.

Share indices ended up nearly 3 per cent, after weakening nearly 2 per cent intraday, as news that most banks have agreed to cut their lending rates boosted sentiment.

“Equities have done so well after a long time. The attitude towards rupee is slowly improving because of which we saw huge selling,” said Madhusudan Somani, head of foreign exchange trading at YES Bank. There have been good inflows from foreign institutional investors and foreign direct investment, said a dealer at a UK bank.

State Bank of India, Bank of Maharashtra, Indian Overseas Bank, Indian Bank and Central Bank of India have agreed to ease their lending rates by up to 100 bps, while Finance Minister P Chidambaram ensured ample liquidity to banks.