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ONGC's $-buying erodes Indian unit's early gains; Rs 42.74

The rupee, after some initial appreciation, ended marginally lower by one paise against the greenback on a fairly active interbank foreign exchange market today.

Opening steady at Rs 42.73/7350 to the US $, the rupee showed some signs of strengthening in the morning on corporate dollar off-loading and moved upto Rs 42.7050/7150 level.

However, later, fresh dollar buying, mainly by Oil and Natural Gas Corporation put some pressure on the rupee, and it lost its morning gains and closed one paise lower at Rs 42.74/7450 as against Rs 42.73/325 the previous session. State Bank of India has reportedly sold dollars.

It was just the matter of demand and supply which moved the rupee slightly both ways, dealers said, adding that no major fluctuation is expected till elections, in the absence of important policy decisions and other market-moving factors.

Forward premia opened higher in the morning as the call rates were firming up at the interbank call money market.

But it eased later on good receivings and finally closed 1-2 paise lower from the previous day's closing levels. The six-month and yearly annualised premia closed nearly steady at 5.97 per cent and 6.82 per cent respectively.

Cash/spot premium ended at 2.75-3.50 paise while cash/tomorrow finished at 0.75-1.50 paise. The month-wise premia in paise were: May 10-11, June 29-30, July 50-51, August 71-73, September 94-96, October 118-120, November 143-145, December 171-174, January 200-203, February 226-229, March 253-256 and April 279-282.

Meanwhile, the Reserve Bank of India maintained its reference rate for US dollar at Rs 42.73 today.

The rupee weakened against pound sterling and euro while it remained nearly steady against the Japanese yen. The rupee ended against sterling at Rs 69.89 (69.49), euro at Rs 46.17 (45.66) and yen at Rs 35.39 (35.35).

In the domestic money market, the call rates opened higher at 9.25-9.50 per cent, further firmed up and closed at 11.00 per cent on heavy demand for funds from participants ahead of the reporting Friday tomorrow.

In overseas markets, the US dollar rose against yen in Tokyo and dollar bought 120.48 yen late afternoon, up 0.90 yen from late last Friday in Tokyo, but below its late New York level of Wednesday of 120.65 yen. In other currencies, the euro was quoted at 130.26 yen, up from 126.86 yen late Friday in Tokyo.

In New York, the dollar moved lower slightly from its level on Wednesday on lingering expectation that any new economy-boosting steps from Japan could help boost its currency.

UNI

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