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Good $ supply, low demand keep rupee in a tight range: Rs 42.94

The rupee remained in a tight range and ended steady at Rs 42.9350/9400 at a quiet interbank foreign exchange market today.

The Indian unit opened a bit higher at Rs 42.91/93, later eased slightly from the opening level to 42.93/94 , and hovered around that level throughout the day. It closed steady at Rs 42.9350/9400 as compared to the previous day's close Rs 42.93/94.

Dealers said the market was very quiet today what with fairly good dollar supply coupled with lower corporate demand. The rupee could have appreciated marginally. But State Bank of India bought the dollars throughout the day, holding the rupee in a tight range.

Forward premia drifted further lower on scattered receiving and nominal import covering. Near forwards eased by 1-2 paise while far forwards came down by 4-5 paise. The six-month and yearly annualised premia ended lower at 5.33 per cent and 6.17 per cent respectively as compared to 5.48 per cent and 6.29 per cent of the previous day.

Cash/spot and cash/tomorrow premium ended at 1.75-2.00 and 1.50-1.75 paise premium respectively. The month-wise premia in paise were: June 10-12, July 28-31, August 48-51, September 68-71, October 88-91, November 108-111, December 128-131, January 158-161, February 185-188, March 202-205, April 235-138 and May 259-262.

Meanwhile, the Reserve Bank of India revised the reference rate for US dollar by one paise at Rs 42.94 as against Rs 42.93 of the previous day.

In the cross currency, the rupee weakened slightly against pound sterling while it rose a bit against euro and Japanese yen. Sterling ended at Rs 69.06 (68.88), euro at Rs 44.28 (44.55) and yen at Rs 35.38 (35.43).

In the interbank call money market the call rates closed marginally higher at 8.00-8.25 per cent. Opening lower at 7.50-8.00 per cent, the call rates firmed up on good demand for funds, despite today being the reporting Friday.

UNI

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