Tuesday, May 9 2006 11:59 Hrs (IST) - World Time -

Mumbai: The rupee today (May 9, 2006) weakened against the US currency on renewed dollar demand from state-run banks even as the outlook remained positive due to rising FII inflows and cooling crude oil prices.

In moderately active early trade at the Interbank Foreign Exchange (forex) market, the Rupee was quoted at Rs 44.93/94 per dollar, sharply lower from Monday's close of Rs 44.87/88 per dollar, following a weak start at Rs 44.92/94 per dollar.

Dollar demand from public sector banks possibly on behalf of the central bank today exerted fresh pressure on the Rupee even as market sentiments remained upbeat due to rising FII inflows, stable crude oil prices and a retreating dollar overseas, a forex dealer said.

State-run banks normally buy dollars at the behest of the Reserve Bank of India (RBI) in order to curb sharp Rupee gain to protect the interest of exporters.

Foreign Institutional Investors (FIIs) pumped in a whopping US$ 249.1 million into the equity market on May 5 and were reported to have infused nearly US$ 583 miilion in May so far.

World crude oil prices fell below 70 dllars a barrel and was quoted at USD 69.95 a barrel in early Asian trade today due to easing supply concern.

In cross currency trades, the Euro was quoted at Rs 57.05/08, Pound Sterling at Rs 83.44/46 and the Japanese Yen (100) Rs 40.23/25.