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SBI selling hold rupee steady

The monthly premiums surged by about 23 paise on reports that international credit rating agency moody's investors services would review India's country ceiling for foreign currency and bank deposits for a possible downgrade.

However, at the end hours of trading, sentiments calmed down as the State Bank of India entered the market, allowing the forwards to close five paise over the previous levels.

The rupee opened steady at Rs 41.78/80, ruled almost in the same range throughout the day without any significant fluctuations. As the rupee slightly weakened to Rs 41.80/81 levels, SBI sold heavy quantity of dollars at Rs 41.78/80 level arresting any further slide, leading dealers said adding that the rupee might have reached Rs 42.00 if the SBI did not resort to heavy dollar selling.

Heavy covering by importers was done in near and far forward dollars as the importers were expecting further fall of the rupee.

The rupee had depreciated by more than Rs 2 after the nuclear tests. Subsequently, Standard and Poor's change in outlook from 'stable' to 'negative' and the World Bank's indefinite postponment of loans to India allowed the rupee which was at Rs 39.71 on April 30 to decline to a record low of Rs 41.78/70 today.

The six-month annualised and the 12-month premia were quoted higher at 9.16 per cent and 9.20 per cent against 8.84 and 9.06 per cent of the previous day.

Cash/spot business was conducted by 0.75-1 paisa premium, while the cash/tom was done at 0.50-0.75 pais. The monthwise premium in paise were July 12-14 paise, July 43-46, August 76-79, September 110-114, October 146-149 paise, November 178-182 paise, December 213-217 paise, January 247-251 paise, February 280-284 paise, March 313-317 paise, April 343-348 paise and May 373-378 paise.

The pound sterling and mark remained steady against the US dollar while the yen weakened further against the US dollar. The pound sterling was quoted at Rs 68.50, DM at Rs 23.60 and yen at Rs 30.05.

The Reserve Bank of India maintained the reference rate for US dollar at Rs 41.80 for the third consecutive day today.

UNI