April 23, 2008	Wednesday	Rabi-us-Sani 16, 1429

KARACHI, April 22: The rupee inched up on Tuesday following some dollar inflows in the market but dealers said persistent demand for the US currency could mean that the rupee’s gains are short-lived.

The rupee closed at 63.98/64.03 to the dollar, up from Monday’s close of 64.05/64.10. During the day, it traded as low as 64.10 and as high as 63.70, dealers said.

“We have seen some strong inflows over the last couple of days, which have helped the rupee hold steady,” said a dealer at a foreign bank.

However, dealers said continued high dollar demand could push the rupee lower.

“There have been inflows of over $200m in the last couple of days, but the demand is so heavy that the rupee has not gained much,” said another dealer.

“I don’t think these strong inflows will continue for long, while the demand is likely to continue, and that would put pressure on the rupee,” he said.Some dealers said the demand for the dollar from importers and a lack of inflows could pull the currency down to its life-time low of 64.40 traded in September 2001 or even lower.

The rupee has already lost more than 2 per cent this month, and nearly 4 per cent this year.

In the money market, overnight call rates ended at 10.40 per cent, unchanged from Monday.—Reuters