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Rupee firms up after initial weakness; steady at Rs 42.28/29

The rupee showed signs of weakness against the greenback due to international credit agency Standard & Poor's lowering India's sovereign rating to BB from BB Plus and long-term local currency sovereign credit rating to BBB from BBB Plus, but stablised during the later part of trading, closing at the previous levels at the interbank foreign exchange market here today.

Opening at Rs 42.31/32 against the dollar, the rupee was traded at Rs 42.33/34 levels just before the mid-session. Dealers informed that a few deals were struck at Rs 42.42 levels. Adequate availability of the US unit aided the rupee's rise during the end of trading, resulting in the rupee closing at Rs 42.28/29.

''S&P's decision made a few participants rush to the market to buy dollars. However, later enough supply on account of three holidays during this week supported the rupee's rise,'' said a dealer.

Cash/spot was quoted at 1.75-2.25 paise, tomorrow/spot at 0.00-0.25 paise and cash/tomorrow at 1.5-1.75 paise levels at the fag end of the day.

The monthly premia were 1-2 for October, 21-24 for November, 49-52 for December, 79-83 for January, 109-113 for February, 140-145 for March and 174-177 for April. The six-month annualised premia ended at 8.32 per cent.

The rupee ended at Rs 71.64 against pound sterling, Rs 25.76 against deutsche mark and Rs 35.67 against Japanese yen (per 100 units).

Meanwhile, the Reserve Bank of India fixed the reference rate of Rs 42.29 per dollar as against the previous figure of Rs 42.30.

UNI