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SBI continues rescue act; rupee down three paise to US $ at Rs 43.46

• Rs 43.46 vs $
• Rs 46.45 vs euro
• Rs 70.04 vs pound
• Rs 37.83 vs yen (100)

The Indian rupee touched the intra-day low of Rs 43.50 level against the greenback on heavy corporate dollar demand, but recovered partially on State Bank of India's support and closed further lower by three paise at Rs 43.4550/4650, at an active interbank foreign exchange market today.

The rupee opened sharply lower at Rs 43.47/49 and further fell to Rs 43.4850/4950 in the morning, as reports of shooting down a Pakistan spy aircraft and other developments at the Indo-Pak border unnerved the market players, who started buying the greenback heavily.

However, the rupee fall was arrested as State Bank of India sold huge amounts of dollars in the market.

The rupee recovered some of its morning losses and closed at 43.4550/4650, three paise lower from 43.4250/43 of the previous day.

Dealers said the rupee which has already been under presure due to the rise in the oil prices and disinvestment by foreign institutional investors ahead of the election, reacted sharply on fresh developments at the border. But for the SBI's support, the rupee would have crashed further, they added.

Forward premia, tracking the spot market, moved up sharply in the morning on heavy paying pressure by nationalised banks. However, it eased slightly from its morning high and closed higher.

The near forward premia moved up by 2-3 paise while far forwards shot up by 10-12 paise. The sixth month and yearly annualised premia closed higher at 5.38 per cent and 5.49 per cent respectively as compared to 4.90 per cent and 5.16 per cent of the previous day.

Cash/spot premium ended at 0.75-1.25 paise and cash/tomorrow finished at 0.50-0.75 paise. The month-wise premia in paise were: August 12-13, September 28-30, October 45-47, November 63-65, December 84-86, January 108-110, February 128-131, March 148-151, April 168-171, May 188-191, June 209-211 and July 229-231.

Meanwhile, the Reserve Bank of India fixed the reference rate for US dollar at Rs 43.49 as against Rs 43.45 of the previous day.

In the cross currency, the rupee appreciated against euro while it remained nearly steady against pound sterling and Japanese yen. Rupee ended against euro higher at 46.45 (46.70), sterling at 70.04 (70.09) and yen at 37.83 (37.84).

At the domestic money market, the call rates ruled in a relatively higher range of 9.10-9.50 per cent during the day on heavy demand for funds ahead of the reporting Friday. The rates closed at at 9.40-9.50 per cent, higher from 8.90-9.00 per cent of the previous day.

UNI

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