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US-Iraq face-off has no effect on rupee; SBI's late $-selling spurs recovery; Rs 42.54/55

At the interbank foreign exchange market, the Indian rupee closed at Rs 42.54/55 against the US dollar, down one paisa. No major impact of the US strike against Iraq was noticeable.

State Bank of India entered the market late in the afternoon and resorted to considerable dollar selling, helping the rupee to recover after early losses in the morning due to volatile trading.

The rupee's recovery from opening levels happened on Thursday afternoon in spot deals. The rupee recovered in thin trading after weakening to Rs 42.55/58 in early deals against its previous close of Rs 42.53/535.

Forward premia were steady, except a tiny adjustment due to a change in the spot date to Monday.

The annualised six-month premium was quoted at 7.64 per cent against 7.59 per cent previously.

The rupee ended a bit higher against yen at Rs 36.62 (Rs 36.77), deutsche mark at Rs 25.60 (Rs 25.66) while it weakened slightly against sterling at Rs 71.48 (Rs 71.46).

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