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Corporate $-buying weakens rupee: Rs 43.20

The rupee further slid by about four paise against the greenback on heavy corporate dollar demand spurred by the Kargil conflict at the interbank foreign exchange market today.

The rupee opened a bit lower at Rs 43.1750/1850, showed a slow but mild weakening trend during the day on sustained corporate greenback demand. The Indian unit ended lower at 43.1950/2050, as compared to Rs 43.16/17 of the previous day, losing about four paise.

State Bank of India was quoting at Rs 43.18/19 level, dealers said.

The market sentiment continued to be nervous on the border crisis despite the warning to Pakistan by G-8 countries at the Cologne summit. Unlike in the capital market, the forex market did not have any impact of the G-8 resolution, they added.

However, forward dollar market remained almost dull and premia closed nearly steady on scattered receivings. The six-month and yearly annualised premia closed almost steady at 5.01 and 5.91 per cent.

Cash/spot and cash/tomorrow premia ended at 1.00-1.25 paise and 0.50-0.65 paise respectively. The month-wise premia in paise were June 2.5-4.5, July 19-20, August 37-39, September 54-56, October 72-74, November 92-94, December 111-114, January 141-143, February 164-167, March 189-192, April 203-206 and May 237-239.

Meanwhile, the Reserve Bank of India fixed the reference rate for US dollar at Rs 43.19 today as against Rs 43.17 of the previous day.

The rupee eased slightly against Japanese yen, inched up against euro, while it remained almost steady against pound sterling. The yen ended at Rs 35.55 (35.38), euro at Rs 44.63 (44.70) and pound sterling at Rs 68.65 (68.67).

At the interbank call money market, the call rates opened steady at 8.60-8.75 per cent, ranged in a relatively higher level of 8.60-9.00 per cent during the day on advance tax outflows pressure. It closed at 8.75-8.90, a bit higher from the previous closing of 8.60-8.75 per cent.

In Tokyo, the US dollar fell against the yen Tuesday as Japanese life insurers and exporters sold the US currency in the absence of intervention by the Bank of Japan. The dollar bought 121.91 yen, down 0.43 yen from late Monday in Tokyo and also below its late New York level of 122.42 yen overnight. The euro was traded at 125.94 yen, down from 126.66 yen late Monday in Tokyo.

UNI

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