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Rupee closes steady after initial rise; Rs 42.75 vs $

The rupee ended steady at Rs 42.74/75 against the greenback on a dull interbank foreign exchange market today.

Opening a bit higher at Rs 42.73/74, the rupee further moved up to Rs 42.7250 level in the morning on moderate dollar sales and absence of adequate demand.

However, fresh dollar buying by banks, especially State Bank of India, pushed the rupee down to Rs 42.75/76 level, before closing steady at Rs 42.74/75.

Dealers said that market was very dull in the morning and the rupee showed some sign of appreciation, but it lost the initial gains due to fresh dollar demand in the afternoon.

Forward premia, after a narrow movements, drifted lower at close on good receivings. Near forwards eased by 1-2 paise while far forwards dropped by 8-10 paise. The six-month and yearly annualised premia ended at 5.68 (5.85 ) per cent and 6.35 (6.63 ) per cent respectively.

Premia on cash/spot ended at 1.00-1.25 paise while cash/tomorrow finished at 0.50-0.75 paise. The monthly premium in paise were: May 8-8.5, June 26-28, July 46-48, August 67-68, September 87-89, October 1o9-111, November 132-134, December 158-160, January 184-186, February 208-210, March 233-235 and April 256-258.

Meanwhile, the Reserve Bank of India revised the reference rate for US dollar by three paise at Rs 42.75 as against Rs 42.72 of the previous day.

In the cross currency market, rupee strengthened slightly against pound sterling and euro while it eased a bit against the Japanese yen. Sterling ended at Rs 69.22 (69.34), euro at Rs 45.51 (45.95) and yen at Rs 35.37 (35.26).

At the interbank call money market, the call rates ruled higher as the market witnessed some liquidity tightening due to the RBI auction of government stock for Rs 5,000 on Tuesday.

The rates opened higher at 10.00-10.25 cent, touched the high of 10.75 per cent before closing at 9.50-10.00 per cent, higher from the previous day's close of 9.00-9.10 per cent.

In Tokyo, the US dollar was slightly higher against the yen. The dollar quoted 120.92 yen, up 0.04 yen from late Tuesday in Tokyo but below its late New York level of 129.97 yen overnight.

The euro remained under pressure due to continued unrest in Kosovo and was quoted lower at 129.48 yen in early trading, from 130.90 yen late Tuesday in Tokyo.

UNI

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