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Rupee weakens by 10 paise

The Indian rupee weakened by 10 paise against the US greenback on hectic dollar demand by corporates and banks in the interbank foreign exchange market today.

The news report about the fall in the country's export by 17.22 per cent to US dollar 2.36 billion in May 1998, caused an adverse impact on the rupee. Panicky importers and banks started heavy dollar buying, fearing further decrease in rupee value in the near future, dealers said, adding that declining exports and increasing imports would result in larger trade deficits.

The rupee opened steady at 42.47/48, moved down to touch the day's low of 42.64 in the morning on heavy dollar demand by corporates and banks. However, later in the afternoon, it recovered partially on fresh dollar sales by exporters and closed at Rs 42.57/58 against Rs 42.47/48 the previous day.

The Reserve Bank of India has fixed the reference rate for the US dollar at 42.61, lower by 15 paise as against Rs 42.46 on Monday.

Nominal import covering was conducted in near and far forward dollars, dealers said. The forward premia came down a bit on export receiving, and the sixth month and annualised premia quoted at 9.51 per cent and 10.16 per cent respectively.

Cash/spot business was conducted at 0.50 -0.75 paise premium, while cash/tom was done at level to 0.25 paise. The monthwise premia in paise were July (14-17), August (47-50), September (80-85), October (115-120), November (151-157), December (187-192), January (227-232), February (265-270), March (305-310), April (342-348) and May (379-384).

In the overseas market, the pound sterling, the deutsche mark and the Japanese yen remained almost steady against the US dollar.

The rupee slightly declined against the yen while remaining almost steady against the deutsche mark and the sterling. The sterling was worth Rs 69.71, the deutsche mark Rs 23.44 and 100 yen, Rs 30.47.

UNI