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Demand, supply match; rupee gains nine paise, Rs 42.46/47

The Indian rupee appreciated further by nine paise against the American greenback in a range-bound interbank foreign exchange (forex) market today.

The Indian unit strengthened by Rs 1.1 during the last three days trading, following sops announced by the Reserve Bank of India to restrict devaluation of rupee against the greenback, which touched an all-time low in the last week.

The rupee opened marginally higher at Rs 42.55/56 against the previous close of Rs 42.56/58. In the intra-day trading there was moderate demand for dollar by corporates sectors and banks, but which was matched by sufficient supply.

Finally it closed at Rs 42.46/47, leading dealers said and added that State Bank of India has stayed away from the business. The local call money market the rates opened higher at 10-12 per cent level but finally closed lower at 7.50-8.00 per cent on lower demand for fund from participants.

The RBI has fixed the reference rate for US dollar at Rs 42.48, nine paise lower against the previous fix of Rs 42.57.

In the cross currency, the rupee remained constant against the pound sterling at Rs 69.55 (Rs 69.55), while ruled nearly steady against deutsche mark at Rs 23.68 (Rs 23.67) and rose against Japanese yen to Rs 29.39 (Rs 29.45).

Cash/spot business were conducted lower between 2.50-3.00 paise premium and cash/tomorrow were between 0.50-1.00 paise premium. The month-wise premiums in paise were for August 7-10 (17-21), September 59-64 (74-82), October 95-100 (117-125), November 126-131 (150-160), December 164-169 (181-195), January 200-206 (220-235), February 235-241 (255-275), March 275-282 (305-320), April 310-318 (350-370) and May 345-355 (410-395).

The first month annualised premium was quoted at 15.58 per cent, the third was quoted lower at 11.72 from 13.92 per cent and six month also quoted lower at 11.72 from 12.06 per cent. The annualised premia was quoted at 10.97 per cent level.

According to the weekly statistical supplement of the RBI, the total foreign currency reserves of India declined by $ 519 million to $ 26.6 billion during the week ended August 14.

The fall of $ 502 million in foreign currency assets contributed largely to the decline of the reserve level. Special drawing rights also fell by $ 17 million during the week.

Meanwhile, the Union government had borrowed an additional Rs 19.23 billion from the RBI as the total advances from the RBI rose to Rs 74.83 billion. However, there was a fall of Rs 2.23 billion in borrowing of the state governments during the week ended August 7.

The total liabilities and assets of the RBI increased by Rs 21.28 billion to Rs 2.86 trillion of which the foreign currency assets went up by Rs 300 million only.

UNI