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Rupee dips two paise as corporates rush for the $; Rs 42.76

The rupee weakened slightly against the greenback on fresh corporate dollar demand at an active interbank foreign exchange market today.

Opening nearly steady at Rs 42.74/75, the rupee came under pressure as corporates started heavy dollar buying and moved down to a low of Rs 42.7850 level.

However, the Indian unit recoverd part of its early loss and closed a bit lower at Rs 42.75/76 as against Rs 42.74/7450 of the previous day.

Dealers said the market which remained dull for the last few days, witnessed good activity today, and it was mainly a buyer's market. Oil and Natural Gas Corporation has reportedly purchased huge amounts of US dollars, dealers said.

Forward markets also witnessed hectic activity today and forward premia moved up moderately on paying pressure.

Heavy import covering was done on both near and far-forwards as importers felt the premia are at lower levels now. Some export cancellation also helped the rising of the premia. Near-forwards moved up by 1-2 paise while far-forwards rose by 8-10 paise.

The six-month and yearly annualised premia ended higher at 5.26 per cent and 6.23 per cent respectively as compared to 4.97 per cent and 5.91 per cent of the previous day.

Cash/spot and cash/tomorrow premia ended at 1.5-2.00 paise and 0.25-0.50 paise respectively. The month-wise premia in paise were: May 1.5-2.5, June 17.5-19, July 34-36, August 54-56, September 74-77, October 94-97, November 117-120, December 140-142, January 168-170, February 195-198, March 218-221 and April 242-244.

Meanwhile, the Reserve Bank of India revised the reference rate for US dollar by three paise at Rs 42.76 as against Rs 42.73 per unit of the previous day.

In the cross currency, rupee rose slightly against pound sterling, while it weakened a bit against euro and Japanese yen. Sterling ended at Rs 68.93 (69.08), euro at Rs 45.49 (45.42) and yen at Rs 34.42 (34.32).

In the call money market, the call rates ruled around the 8 per cent level throughout the day and closed steady at 8.00-8.10 per cent as most of the participants had covered their position ahead of the reporting Friday.

In the Tokyo market, the dollar ruled higher against the yen in early trading Thursday, following its overnight advance on Wall Street.

The dollar bought 124.40 yen in early trading, up 0.70 yen from late Wednesday in Tokyo and also above its late New York level of 124.21 yen overnight.

The dollar strengthened following the release of the Bank of Japan's monthly report, traders said.

The euro was quoted at 132.66 yen, up from 131.60 yen late Wednesday in Tokyo.

UNI

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