Rupee stages rally

MUMBAI, July 1: Continuing its upward march, the rupee closed at 42.19/20 against the dollar on Wednesday. With this, the rupee has gained by nearly 86 paise against the dollar after it fell to the 43.06 level last week. Opening the day at 42.36/38, the currency gained against the greenback as dollar inflows improved. It hovered at 42.26/27 levels for the most part of morning session before gaining to close at 42.19/20. The rupee8217;s appreciation was gradual, dealers said.

quot;There is a definite change in sentiment. US sanctions are not seen as crippling the economy8230; panic reactions on account Moody8217;s downgrade have worn off,quot; a senior banker said.

The rupee has appreciated by over 1 per cent over the last few days ever since the World Bank cleared the 500 million multi-sectoral loan for Andhra Pradesh. Now the World Bank has indicated about sanctioning of more loans. Japan has also decided to extend more loans. 8220;The FII selling pressure on the stock markets has also declined,8221; said a dealer.

Corporatedemand for dollars was lacklustre. In the forwards, the six-month annualised premium closed at 9.5 per cent, softer from its last close of 9.67 per cent. quot;Premiums went lower, more so in the far terms,quot; a dealer said.