Search the Internet          Tips  Sites: Finance, Investment

Rupee ends lower on UTI probe concerns

The rupee ended lower on Wednesday amid concerns over a probe into the Unit Trust of India, the country's largest mutual fund manager.

The rupee, which held in a tight 47.11-47.13 per dollar range through the day, slipped in the last hour of trade to close at 47.1400/1500. It had closed Tuesday at 47.1175/1275.

"Corporates are slightly worried and they have been making enquiries to buy dollars," a dealer with a state-owned bank said.

Dealers said sentiment was subdued amid fears that the probe into UTI's investments could reveal more questionable deals.

The former chairman and two directors of UTI were arrested last weekend, allegedly for losing Rs 328 million by investing in a software company against their own research department's advice.

However, importer demand for dollars has been sluggish because of an industrial slowdown.

And inflows from exporters and foreign funds have been steadily trickling in.

Despite sluggish stock market conditions, foreign funds have remained net buyers of Indian assets, including shares, although volumes have dwindled.

Net purchases by foreign funds during July 1-23 totalled $112 million. In June, their net purchases were $240.1 million.

HDFC Bank, which raised $172.5 million through an American Depositary Shares issue last Friday, is expected to bring in the funds within a month of its listing.

A senior official at the bank, however, did not comment on when the funds will be brought into the market. Dollar forwards, which had softened in intra-day trade on inter-bank receiving, also firmed up as some corporate paid to covering open positions.

The six-month annualised forward closed at 4.75 per cent, up from the day's low of 4.72 per cent. It closed Tuesday at 4.74 per cent.

ALSO READ:
The UTI Crisis