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Re tumbles to all-time low, recovers

In reaction to Moody's downgrading India's sovereign credit rating from investment grade to the speculative category, the rupee tumbled to an all-time low of Rs 42.85 in intra-day trading at the Interbank foreign exchange market here today.

The rupee opened higher at Rs 42.36/38 but fell to the historic low in the pre-mid session trading due to heavy dollar buying by the banking sector. Profit booking by exporters at higher levels allowed the Indian unit to stabilise at Rs 42.65. The rupee ended at Rs 42.72/75, losing 55 paise in a single trading session.

The forward premiums shot up with the six -month annualised premium closing at 12.10 per cent, while the 12- month premium closed at 11.33 per cent.

Cash spot was quoted at 2.5- 3.00 paise and cash tom at 1.00- 1.50 paise.

Heavy import booking was conducted in near forward dollars. Exporters sold dollars in the post mid- session trading which pushed the premiums down moderately, dealers said.

The monthwise premium in paise were June 6/8 paise, July 58/61 paise, August 103/107 paise, September 146-150 paise, October 183/188 paise, November 224/229 paise, December 265/270 paise, January 307/312 paise, and February 349/352 paise.

The rupee was almost steady against the pound sterling and the deutsche mark while it strengthened slightly against the Japanese yen. It was quoted at Rs 71.23 per pound sterling, Rs 23.79 against the deutsche mark and Rs 30.93 against the yen.

The Reserve Bank of India has fixed the reference rate at Rs 42.69 per US dollar as against 42.20 the previous day.

The overnight call money rates also opened higher at 7.25-7.50, moved up to 8.25 level in the mid-session before closing at 7.25-7.50 in the Interbank call money market today.

UNI