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Rupee gains ground

The rupee strengthened by about six paise against the US greenback in a volatile interbank foreign exchange market.

It opened steady at 42.50/53 but slightly weakened to 42.53/55 in the morning on scattered dollar demand. But later, on better dollar selling by banks and corporates, it moved upwards to the 42.38/39 level and finally ended at 42.44/47 as against the previous close of Rs 42.51/53.

Dealers said the dollar demand was less today. Exporters and banks were selling dollars.

The State Bank of India did two-way business, buying and selling dollars, dealers said.

Forward premiums also came down by about 10 paise and the sixth month annualised and yearly premiums were quoted lower at 9.58 per cent and 10.28 per cent. Importers's cancellation of earlier contracts pushed down the forward dollars, dealers said. The nominal amount of import booking was conducted in forward dollars, they added.

Cash/spot business was conducted at 4-5 paise premium and cash/tom between 2 and 2.50 paise premium.

The monthwise premiums in paise were July 26-29 paise, August 61-65 paise, September 92-97 paise, October 125-130 paise, November 161-166 paise, December 191-196 paise, January 235-240 paise, February 273-280 paise and March 314-319 paise.

The rupee strengthened a bit against the pound sterling and weakened slightly against the deutsche mark and Japanese yen. It quoted 70.12 for sterling, 23.41 for dm and 30.49 for yen.

In the overseas market, the sterling weakened, while the dm and yen become stronger against the US dollar.

The Reserve Bank of India, meanwhile, has fixed the reference rate for the US dollar at Rs 42.49. It was Rs 42.36 on Thursday.

UNI