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Rupee slide continues, down by 10 paise

The dollar opened higher at Rs 42.33/40 on continuous demand from corporate sectors and banks to meet the regular remittraces. At that level, the State Bank of India sold the dollar to arrest the further downfall of India currency and strengthened the rupee to Rs 42.31/34.

In the mid-trading session, news spread in the market that the Reserve Bank of India, in its meeting to be held this evening, is going to make some statement to support the Indian rupee in the forex market. This improved the Indian currency rate to Rs 42.23/24, leading dealers said.

Finally, the Indian currency closed lower at Rs 42.31/34 on hectic buying support from all corner coupled with turmoil in the Asian market and with the yen touching a seven-year low against the dollar.

As the news flashed in a commercial news circuit, importers entered in the market and made some near-forward cancellations due to the feeling that if the RBI announces some sops, the rupee may strengthen.

A nominal amount of export and import booking was conducted in cash to spot basis, while marginal amount of import booking was done farward basis in the merchants' sections.

In swaps sections, the pound sterling opened higher at Rs 68.96 and closed at Rs 69.85, mark opened at Rs 23.58 and finished at Rs 23.53, and the yen opened at Rs 29.87 and settled down at Rs 29.89 per 100 yen.

The six-month annualised premia worked out at 9.7 per cent. The forward premiums ruled nearly steady. The cash to spot dollar was traded at 1.00-1.25 per cent. Forward premia quoted, in paise, are: 14-16 for June, 50-52 for July, 85--88 for August, 119-122 for September, 153-156 for October, 185-188 for November and 218-222 for Decemeber.

The RBI fixed the reference rate at Rs 42.38.

UNI