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August 3, 2000
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Rupee marginally weaker at 45.39/$

The Indian rupee was steady towards the close of trade on Thursday, but the market was edgy expecting some announcement from the central bank, dealers said.

Dealers said there was uncertainty over whether the Reserve Bank of India's new short-term liquidity tightening measures -- the four and seven-day repos - will be continued on Friday.

There was also speculation the central bank may hold a meeting to announce fresh measures for the rupee on Friday.

The rupee was steady at 45.37/39 per dollar, off lows of 45.45 and compared with an opening 45.32/33.

Dealers said dollar demand from corporates and foreign funds seen in early trade had waned.

The rupee was quoted at 45.37/39 per dollar at 2:20 pm, off lows of 45.45 struck in stray deals and compared with a steady opening 45.30/33.

It eased briefly to 45.34 just before the Reserve Bank of India announced the results of its repo auctions, but banks used the opportunity to add to dollar positions, dealers said.

The RBI on Wednesday announced it will hold four-day and seven-day securities repurchase agreement (repo) auctions, in addition to its daily repos and reverse repos, to absorb more funds from the highly liquid market.

It set a 10 per cent cut-off at Thursday's four and seven-day repo auctions and accepted total bids worth Rs 41.3 billion for the two maturities.

"It was a case of sell the rumour, buy the fact," a dealer with a French bank said.

Banks sold dollars on speculation over the likely repo results and bought back as soon as they were announced, he said.

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