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Ample dollar supply pushes rupee up by two paise; Rs 42.49/50

The Indian currency strengthened further against the US dollar by two paise on the second consecutive day due to lack of demand and ample supply on the interbank foreign exchange market today.

The rupee opening on its previous close of Rs 42.51/52 per unit. Excessive dollar buying from corporates and banks in the morning resulted in the rupee touching a level of Rs 42.52 per unit. State Bank of India also bought dollars in the morning and afternoon session. After the renewed dollar supply in market, the rupee recovered its position and finally closed at Rs 42.49/50. The forward dollar also looks steady, a leading dealer said.

The cash/spot business was done higher at 2.00-2.50 paise premium. Cash/tomorrow was also went up at 1.75-2.00 paise premium. The half- yearly and annual premia was quoted lower at 8.01 and 8.76 per cent respectively.

The Reserve Bank of India fixed the reference rate for US dollar at Rs 42.51, two paise lower against the previous fix of Rs 42.53 per unit.

The monthly forward premium in percentage was also down with the premium quoted for first month being 7.44 (7.70), for third month 7.53 (8.25) and for sixth month 8.01 (8.69).

The premium in paise were quoted at 25-28 for October, 50-52 for November, 77-81 for December, 106-110 for January, 136-140 for February, 167-170 for March, 199-204 for April, 232-237 for May, 265-270 for June, 298-303 for July and for August 330-355 per cent.

In the overseas, the dollar fell against major currencies on expectations of an interest rate cut and concerns about fallout from the rescue of a major hedge fund.

In the cross currency section here, rupee was quoted Rs 71.98 to Rs 72.45 against the pound sterling, Rs 25.32 to Rs 25.55 against the deutsche mark and Rs 31.40 to Rs 3179 against the Japanese yen. In the merchant section nominal booking was done.

UNI