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Rupee slide unabated; down six paise, Rs 42.66/67

The Indian rupee weakened further by six paise against the American greenback on the third consecutive trading day in the interbank foreign exchange market in Bombay today.

The rupee opened lower at Rs 42.63/66, touched day's low at Rs 42.69/71 on hectic dollar buying from corporates and banks, and Indian unit depreciated six paise against the previous close of Rs 42.60/63.

A report was received from Duff and Phelps Credit Rating Company, USA, regarding the change in India's sovereign rating to BB+ from BBB- and the local currency rating to BBB from BBB+. This had its own impact on the market.

In the light of significant fiscal slippage and the potential for balance of payment deterioration in the coming years, Indian currency hovered almost steady at Rs 42.66/68 most part of the day and finally closed at Rs 42.66/67, leading dealers said. They added that the major market player State Bank of India has sold some dollar in the range of Rs 42.68/70 for the recovery of the Indian unit.

The forward dollar looked steady. The cash-to-spot business was done between 0.25 - 0.50 paise premium and cash to tome was quoted at 0-0.25 paise premium.

The Reserve Bank of India has fixed the reference rate per US dollar at Rs 42.69, fourteen paise higher than the previous fix of Rs 42.55.

The annualised premia for the first month firmed up to 4.47 to 4.14, for the third month increased to 6.46 from 5.91, for the six month moved up to 7.59 from 7.34.

The monthly forward premium (in paise) were as follows: 7-9 for August, 27-30 for September, 56-59 for October, 86-89 for November, 118-121 for December, 149-153 for January, 179-184 for February, 219-223 for March, 253-257 for April, 288-293 for May, 320-325 for June and 352-357 for July.

In the overseas market, rupee was higher against pound sterling at Rs 69.55 (69.68), against deutsche mark at Rs 23.95 (24.03) and against Japanese yen at Rs 29.12 (29.48). In the merchant section, good amount of import booking done in spot-to-cash and moderate amount of export booking was done in near forwards.

UNI