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Corporates on month-end covering; rupee down, Rs 42.50/52

The Indian rupee weakened slightly against the greenback on a quiet interbank foreign exchange market here today.

Opening higher at Rs 42.50/52, the rupee moved in a narrow range between Rs 42.47/50 and Rs 42.54/56 with moderate dollar demand and matching supply. Dealers said that as some corporates and banks were covering their month-end position, the rupee moved down to Rs 42.54/56 level in the morning, but renewed dollar sales helped the rupee to recover and to close at the opening level of Rs 42.50/52 against Tuesday's close of Rs 42.48/50, down two paise.

Forward premiums remained almost steady. Nominal import booking was conducted in near forward dollars, dealers said adding some import cancellation also done today. The sixth-month and yearly premiums were quoted at 10.43 and 10.54 per cent respectively.

Cash/spot business trades were conducted between 3.25-4.00 paise premium while cash/tomorrow were done betwen 0.25-0.50 paise premium. The month-wise premiums in paise were: August 53-58, October 91-96, November 121-126, December 156-161, January 191-196, February 223-228, March 261-267, April 305-310, and May 344-350.

The Reserve Bank of India has revised the reference rate for US dollar at Rs 42.53 against Rs 42.50 of Tuesday.

In the domestic money market, the call money interest rate ruled easy today as the participants have already squared up their position ahead of the reporting Friday tomorrow. The rates ruled in a narrow range between 6.75 and 7.75 most part of the day and closed at 7.00-7.50 per cent.

In the overseas market, the dollar weakened a bit against sterling and remained steady against duetsche mark and yen. The rupee weakened marginally against sterling, DM and yen and quoted for sterling at Rs 70.03 (69.59), for DM Rs 23.55 (23.63) and for yen at Rs 29.76 (29.38).

UNI