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SBI buying, importers' covering push rupee down eight paise; Rs 42.50/52 vs the $

Heavy dollar buying by State Bank of India and covering by importers led the rupee to tumble beyond the Rs 42.50 levels against the greenback at the interbank foreign exchange market today.

The rupee opened unchanged at Rs 42.43 to a dollar. SBI's buying in the market allowed it to fall to Rs 42.46 in the morning session. SBI again entered the market in the afternoon, allowing the rupee to slump to Rs 42.51. According to dealers, some banks booked a profit at this level, which allowed the rupee to recover marginally.

The Indian unit ended the day at Rs 42.50/52, eight paise lower from the previous close of Rs 42.43 per unit.

The forwards, too, witnessed pressure, leading to a growth across all maturities. The monthly premia (in paise) were 18-20 for December, 41-44 for January, 67-75 for February, 99-102 for March, 132-135 for April, 164-167 for May and 197-201 for June.

The six-month annualised premia ended at eight per cent. Cash/spot and cash/tomorrow were not quoted as the New York market was closed.

Tomorrow/spot ended at 0.5-1.5 paise.

According to dealers, they expect the rupee to continue its downtrend tomorrow on account of month-end demand.

Pound sterling ended at Rs 70.38, deutsche mark at Rs 24.92 and Japanese yen at Rs 34.80.

Elsewhere, the Reserve Bank of India fixed the reference rate at Rs 42.48 per US dollar from the previous Rs 42.42.

In international markets, the US dollar rose against the yen, buoyed by purchasing from Japanese mutual funds which plan to invest money overseas. At midday, the greenback bought 121.48 yen, up 0.64 yen from yesterday's closing in Tokyo, but below its late New York level of 121.73 yen overnight.

UNI

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