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Rupee loses ground

The Indian rupee closed lower against the US dollar in a relatively quiet trading and the Reserve Bank of India intervened to bring down the forward premia at the Interbank Foreign Exchange market on Friday.

The rupee opened at 39.61/66 per US unit, moved in the range of 39.67.70 during the morning trade and remained steady till afternoon. However, it dropped to 39.71/73 in the late afternoon due to corporate dollar demand, finally ending at Rs 39.71/76. The previous close was at Rs 39.62/72.

"The forex market had on Thursday reacted to Moody's reported review of Indian banks and financial institutional investors. However, the firm assurance given by Union Finance Secretary Montek Singh Ahluwalia and the RBI governor that the fundamentals of the economy are pretty sound cooled down sentiments," a leading forex analyst said.

The RBI intervened in July and August forwards. Six month forward premia came down to 11 per cent from 12.35, and the yearly annualised premia eased to 10.6 per cent.

Cash-spot business opened higher at 6.50-7.50 paise premium and closed lower in the range of 4.00-4.50 paise.

Forward premia were traded at 31-32 paise for January, 74-75 paise for February, 114-116 paise for March, 152-157 paise for April, 175-182 paise for May, 192-205 paise for June, 221-235 paise for July, 255-265 paise for August, 290-300 paise for September, 325-335 paise for October, 360- 375 paise for November and 395-405 paise for December.

"Not many transactions were conducted in the far forwards," dealers said.

The rupee moved in the range of Rs 64.05-64.37 per pound sterling, 21.82-21.89 against the deutsche mark and of 30.00-30.24 against the Japanese yen (100 yen).

UNI