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Rupee takes a dip of six points, Rs 42.33/34 vs $

The rupee declined sharply by six paise against the greenback on heavy dollar demand from banks and corporates, mainly by State Bank of India, in an active interbank foreign exchange market today.

Opening steady at Rs 42.28/29, the rupee moved down to Rs 42.33/34 in the morning. At that level Grindlays Bank reportedly sold dollars, which helped the rupee to recover partially to Rs 42.31/32 around noon. But in the afternoon, again, renewed dollar demand from the banks and corporates pushed down the rupee to close at Rs 42.33/34 against the previous close of Rs 42.27/28, a loss of six paise.

Dealers said it was because of SBI's heavy buying, the rupee moved down. They also attributed the fall of rupee value to the heavy dollar buying by ICICI, a leading financial institution.

Forward premia also moved a bit higher due to paying pressure on import booking on forwards and lower receiving. Near forwards moved up by around 1-2 paise while far forwards were higher by 3-4 paise. The third month, sixth month and yearly annualised premia were quoted slightly higher at 6.36 per cent, 7.42 per cent and 7.80 per cent respectively.

The premia on cash/spot business was 1-1.25 paise and cash/tomorrow was 0.75-1.00 paise. The month-wise premia in paise were: November 5-8, December 22-27, January 46-51, February 75-80, March 105-110, April 135-140, May 167-172, June 192-201, July 225-230, August 255-260, September 285-290 and October 313-318.

Meanwhile, the Reserve Bank of India fixed the reference rate for US dollar five paise lower at Rs 42.33 against Rs 42.28 of the previous day.

In the overseas market, the US currency registered gain against most of the major currencies on reports that the US was planning to attack Iraq. The US dollar rose against pound sterling, deutsche mark and yen. Sterling was quoted at Rs 70.11, DM at Rs 25.08 and yen at Rs 34.19.

In the domestic money market, the call money interest rates closed steady at 7.90 -8.00 per cent after ruling between 8.00-8.10 per cent level most part of the day.

UNI

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