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RBI salvages rupee from free fall

The Indian unit opened at Rs 40.15-30. The wide spread between bid/offer quotes indicated massive demand in the face of drying up of dollar supplies. It went on a downslide, plunging beyond the Rs 40.40 level. According to some bankers, a few deals were even struck at the Rs 40.50 level.

Intervention by Reserve Bank of India and dollar selling by the State Bank of India cooled sentiments, allowing the rupee to close at Rs 40.22-27.

The apex bank was, however, by and large absent from the forwards segment, which resulted in monthly premiums zooming up and the spreads widening.

Cash/spot closed at 16-18 paise, cash tom at 1-2 paise and tom/spot at 14-15 paise. Dealers said that the covering cost for 2-3 days surged since the call money rates are ruling high.

The forwards (in paise) were 31-34 for January, 92-95 for February, 145-155 for March, 182-190 for April, 215-228 for May and 260-265 for June. The six- month annualised premia closed at 14.16 per cent.

The pound sterling ended at Rs 65.74, the yen at Rs 30.80 (per 100) and the mark at Rs 22.09.

Elsewhere, the RBI fixed the reference rate at Rs 40.27 as against the previous fix of Rs 40.18.

UNI