MUMBAI, JUNE 26: The World Bank's decision to sanction $ 540 million loan for the implementation of Andhra Pradesh state economic restructuring project lifted the sentiments in the foreign exchange market on Friday.Finance secretary Montek Singh Ahluwalia's announcement that another $ 506 million worth of World Bank approval for three projects might come through next week further cheered the rupee which gained by 10 paise to close the day at 42.62/64 over the previous close of 42.72 Tuesday the Indian currency had touched an all time low of 43.06 against the dollar. The $ 540 million World Bank loan is the first instance of such an assistance cleared for the state under social and rural category since the clamp down of the US sanctions against India in the weak of the series of nuclear tests conducted in May. The market has perceived the clearance of the World Bank loan as a postive sign which will boost the sagging rupee.The State Bank of India's late dollar selling in a lacklustre forexmarket also led to the appreciation of the rupee. The rupee opened at 42.72/74, but soon weakened by 5 paise on speculative demand. However, exporters' dollar selling and import cancellations led to the strengthening of the Indian unit to 42.70 The rupee finally closed at 42.62/64 registering a gain of 10 paise over the previous day's closing level.The market was very quiet and there was little dollar demand, which was met equally with dollar selling by exporters. Cash/spot business was done between 3 to 4 paise premium, dealers said. The forward premiums remained steady, tracking the spot rupee.
