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SBI's late $-buying marks day's dull trading: rupee down one paisa to Rs 42.74

Rupee ended one paisa lower against the greenback on a relatively dull interbank foreign exchange market today.

Opening nearly steady at Rs 42.7250/7350, the rupee remained at that level most part of the day on matching dollar supply and demand.

However, rupee came under slight pressure towards the end, when State Bank of India started buying the greenback.

The rupee ended at Rs 42.7400/7450, one paise lower from the previous day's close of Rs 42.7300/7350. Dealers said the rupee remained steady till the afternoon and even showed some sign of appreciation as the inflows in the capital market augmented the dollar supply, but SBI's heavy dollar buying pushed the rupee down.

Forward premia continued to fall on good receiving and lower call rates in the call money market. Near forwards eased by 2-3 paise, while far forwards fell by 4-5 paise.

The six-month and yearly annualised premia ended lower at 4.97 per cent and 5.91 per cent as compared to 5.13 and 6.01 per cent of the previous day.

Cash/spot and cash/tomorrow premia finished at 0.75-1.00 paise and 0.25-0.50 paise respectively. The month-wise premia in paise were: May 3-4, June 17-19, July 33-35, August 52-54, September 71-73, October 90-93, November 111-113, December 133-135, January 159-162, February 183-186, March 208-211 and April 231-234.

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

In the cross currency, the rupee strengthened a bit against pound sterling, euro and Japanese yen. Sterling ended at Rs 69.08 (69.26), euro at Rs 45.42 (45.67) and yen at Rs 34.32 (34.75).

In the domestic money market, the call rates ruled relatively lower, hovering above eight per cent level and closed at 8.00-8.10 per cent, slight lower from the previous close of 8.00-8.25 per cent.

The market witnessed good demand for funds, but the ample liquidity in the system kept the rate at a lower level, dealers said.

In Tokyo market, the US dollar was higher against the yen in early trading Wednesday after the US Federal Reserve's policy-making committee hinted it may raise interest rates.

The dollar bought 123.54 yen in early trading, up 0.68 yen from late Tuesday in Tokyo and also above its late New York level of 123.20 yen overnight. The euro was traded at 131.82 yen in early trading, up from 131.30 yen late Tuesday in Tokyo.

UNI

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