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Rupee strenghtens by 3 paise, closes at 42.59/60

The rupee strengthened slightly by about 3 paise against the US greenback on dollar buying by corporates and short covering by banks in the interbank foreign exchange (forex) market in Bombay on Wednesday.

Opening marginally higher at 42.60/63, the rupee moved upwards to 42.56/57 level in the morning on poor dollar demand and better dollar supply by banks. Later it eased to 42.59/61 and remained at that level most part of the day before closing slightly higher at 42.59/60 as against 42.62/64 the previous day.

Dealers said that the market was dull and demand for the US dollar was very moderate.

Forward premiums also came down moderately on better receiving and lower import booking. The sixth-month and annualised premiums quoted lower at 7.75 per cent (8.40) and 8.95 per cent (9.18) respectively. Far forward premiums were lower by about ten paise, while the near premiums were almost steady.

Cash/spot business was conducted at 0.25-0.50 paise premium and cash/tom was done at level rates to 0.25 paise. The month-wise premiums in paise were: July 4-6, August 30-34, September 58-63, October 88-92, November 119-123, December 144-140, January 179-184, February 220-225 and March 254-259.

The Reserve Bank of India has fixed the reference rate for US dollar at Rs 42.60 against Rs 42.61 yesterday.

In the overseas market, the pound sterling, deutsche mark and yen remained nearly steady against the US dollar. The rupee slightly strengthened against sterling and was steady against yen and dm. Sterling quoted at Rs 69.74, dm at Rs 23.67 and yen at Rs 30.30.

In the domestic money market, the call rates ruled between 5.00 and 5.75 during day and closed at 5.10 per cent.

UNI