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Lower dollar demand, scattered supply keep rupee steady; Rs 42.94 to US $

The Indian rupee ended marginally lower at 42.93/94 against the greenback on a relatively dull interbank foreign exchange market today.

Opening a bit higher at Rs 42.90/93, the rupee remained at that level for quite sometime in the morning with lower dollar demand and scattered supply and further appreciated to Rs 42.89/90.

But renewed dollar buying by banks at that lower level put some pressure on the rupee which later eased marginally and closed at Rs 42.93/94, as compared to Rs 42.9250/9350 of the previous day's close. State Bank of India has reportedly purchased cash dollars.

Dealers said the market remained more or less quiet, with the rupee moving in a narrow range of three paise throughout the day.

Corporates covered only urgent and normal dollar requirement and the panic dollar buying, which was witnessed earlier in the week after the border crisis, seems to have cooled down, they added.

Activity in the forward dollar remained very dull and premia eased marginally on scattered receiving. On an average, the premia drifted lower by 1-2 paise. The six-month and yearly annualised premia closed at 5.48 and 6.29 per cent respectively.

Cash/spot and cash/tomorrow finished at 1.50-1.75 paise and 0.25-00.50 paise premium respectively. The month-wise premia in paise were: June 11-13, July 30-32, August 51-53, September 72-73, October 91-92, November 112-114, December 132-135, January 164-166, February 191-193, March 218-221, April 242-244 and May 265-267.

Meanwhile, the Reserve Bank of India has revised the reference rate for US dollar by one paisa at Rs 42.93 as compared to Rs 42.94 of the previous day.

In the cross currency, the rupee rose against pound sterling and Japanese yen while it remained nearly steady against euro. Sterling ended at Rs 68.97 (Rs 69.20), yen at Rs 35.43 (Rs 35.54) and euro at Rs 44.55 (Rs 44.50).

In the domestic money market, the call rates opened steady at 7.75-7.90 per cent, closed a bit higher at 8.00-8.10 per cent, on good demand for funds ahead of the reporting Friday.

In Tokyo, the dollar moved higher against the yen Thursday morning amid expectations that US interest rates will rise. The dollar bought 121.71 yen in late morning, up 1.17 yen from late Wednesday in Tokyo and also above its late New York level of 121.33 yen overnight.

UNI

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