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Heavy import covering pushes rupee down; Rs 42.31/32

The rupee weakened by two paise against the greenback on heavy import covering by corporates on the interbank foreign exchange market today.

Opened steady at Rs 42.29/30, the rupee rose upto Rs 42.27/28 level in the morning on good dollar sales by banks and corporates and lower demand. However, the gain of the Indian unit was shortlived and it started weakening towards the mid-session and touched the day's low of Rs 42.32/33 in the afternoon on renewed dollar buying by banks and corporates to square up their position.

State Bank of India was also buying dollars in the afternoon, dealers said adding that good import covering was done in both spot and forward dollars in the afternoon. Finally the rupee closed at Rs 42.31/32 against Rs 42.29/30 of the previous day, depreciating by two paise.

Forward premia also moved up marginally on good import covering and lower receiving. The third month, sixth month and yearly annualised premia were quoted marginally higher at 6.05 per cent, 7.21 per cent and 7.65 per cent respectively.

The Reserve Bank of India fixed the reference rate at Rs 42.29 against the US dollar from Rs 42.30 of the previous day.

Cash/spot business conducted at 0.75-1.25 paise premium while cash/tomorrow was done at 0.25- 0.50 paise premium. The month-wise premia in paise were: November 9-12, December 30-33, January 57-60, February 81-85, March 112-117, April 142-147, May 172-177, June 201-206, July 232-235, August 260-265 and September 288-295.

In the overseas market, the pound sterling and deutsche mark weakened a bit against the US dollar while Japanese yen remained steady. The rupee strengthened slightly against sterling and DM and remained almost steady against yen. Sterling was quoted at Rs 70.03 (70.66), DM at Rs 25.48 (25.67) and Yen at Rs 36.66 (36.65).

In the domestic money market, the call money interest rates ruled between 7.75-8.15 per cent level in the day and closed lower at 7.75-8 per cent.

UNI

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