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Rupee moves in very narrow range

Little trading was witnessed on the Interbank foreign exchange market today following the absence of fresh demand from corporate sector and banks.

The market opened at Rs 39.48-50 per US dollar, and was hovering at the same level till noon. Later, suppliers entered the market and injected sufficient more dollars into the market, sending it lower to Rs 39.46-47, a leading dealer said, pointing out that leading market players, the State Bank of India, made transactions both ways.

At the fag end, the SBI bought dollars on behalf of a client, weakening the Indian rupee to 39.49-51.

Another dealer said the market was dull and that the dollar moved only two to three paise movement throughout the day. There was no aggressive buying as most traders were waiting for the formation of the new government before moving in.

The forwards premium declined further by 0.5 paise due to pressure from importers. The six-month annualised premia was quoted at 10.30 per cent.

The cash to spot dollar was quoted at 0.75-1.00 paise premium. The monthly forward premium quoted in paise are: 14-16 for March, 50-53 for April, 81-84 for May, 118-120 for June, 149-152 for July, 190-192 for August, 225-229 for September and 265-266 for October. A nominal amount of export and import booking was done in cash and spot basis and small amount of export booking was conducted in near forwards in the merchant section.

Among the world's major currencies, the pound sterling traded at Rs 64.58, the deutschemark at Rs 21.56, the Japanese yen at Rs 30.97 in cross currency section.

Elsewhere, the Reserve Bank of India fixed the reference rate for the US dollar at Rs 39.49 as against Rs 39.51 on the last working day.

UNI