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Moderate activity, good $ supply helps rupee to gain three paise; Rs 42.50/51

The rupee appreciated by three paise against the greenback on fresh dollar sales by corporates and lower demand at the interbank foreign exchange market today.

Opening a bit higher at Rs 42.52/53, which itself was the day's low, the rupee gradually hardened on good dollar supply by corporates and banks while the demand remained subdued. The Indian unit ended at Rs 42.5050/5150 against its previous close of Rs 42.5350/5450.

Dealers said the market remained quiet with moderate activity in spite of tomorrow's nationwide strike by bank employees.

Forward premia eased a bit in the absence of paying pressure and moderate receivings. Near forward premia eased slightly by about one paise while far forwards were down by about 4-5 paise. The sixth month annualised and yearly premia ended at 6.25 per cent and 7.03 per cent respectively.

Cash/spot ended at 1.00-1.50 paise while cash/tomorrow finished at 0.25-0.50 paise premium. The month-wise premia in paise were: January 7-8, February 23-25, March 44-46, April 71-73, May 92-96, June 117-120, July 143-146, August 171-174, September 199-202, October 225-230, November 254-257 and December 283-286.

Meanwhile, the Reserve Bank of India maintained its reference rate for US dollar at Rs 42.52.

In the domestic money market, the call money interest rates ruled higher and closed at 9.25-9.50 per cent as the market witnessed some liquidity tightening. Participants covered their two-day requirements today itself, in view of the nationwide strike of bank employees tomorrow.

In the cross-currency section, rupee slid against Japanese yen to Rs 39.01 from Rs 38.03 of the previous day.The rupee ended nearly steady against pound sterling at Rs 69.82 while it strengthened slightly against euro at Rs 49.26.

In Tokyo, the US dollar was lower against the yen early Monday on persistent talk about Brazil's economy. Dollar bought 110.14 yen in early trading, down 1.28 yen from late Friday. Euro ended lower at 128.58 yen from 130.08 yen of last Friday.

UNI

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