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Rupee skids to all-time closing low on month-end covering

• Rs 43.59 vs $
• Rs 45.99 vs euro
• Rs 71.79 vs pound
• Rs 40.75 vs yen (100)

The Indian rupee came under slight pressure on hectic month-end covering by corporates and ended at an all-time closing low of Rs 43.59/5950 to the US dollar on a fairly actively interbank foreign exchange market today.

The rupee opened a bit lower at 43.5775/5825, further eased to an intra-day low of the year at Rs 43.60/61 level as market witnessed heavy month-end dollar demand from banks and corporates. However, the State Bank of India stepped in to the market and halted rupee's further fall by resorting to dollar-selling.

The rupee recovered slightly on SBI's dollar selling, but still finished at an-all-time (closing) low of 43.59/5950, losing two paise over Tuesday's close of 43.57/5750.

Dealers atttributed the rupee slide to the month-end corporate dollar demand mainly due to the longer spot date. The spot date has been shifted to October 4 on account of tomorrow's half yearly closing of bank accounts.

Tracking the spot market, forward premia also moved up marginally due to paying pressure. Near forwards moved up by one paisa while far forwards finished 2-3 paise higher. The sixth-month and yearly annualised premia closed higher at 5.64 per cent and 5.65 per cent as against yesterday's 5.44 and 5.55 per cent respectively.

Cash/spot and cash/tomorrow finished higher at 2.5-3.00 paise and 1.25-1.50 paise respectively. The month-wise premia were: October 16-17.5, November 36-37, December 56-57, January 79-81, February 98-102, March 120-122, April 141-144, May 162-165, June 182-185, July 202-205, August 222-225 and September 243-245.

Meanwhile, the Reserve Bank of India fixed the reference rate for US dollar at Rs 43.61 as against Rs 43.57 of the previous day.

In the cross-currency section, the rupee weakened marginally against pound sterling and euro while it rose against yen. Rupee ended against sterling at Rs 71.79 (71.72), euro at Rs 45.99 (45.64) and yen at Rs 40.75 (41.04).

At the interbank call money market, call rates opened nearly steady at 8.80 - 9.00 per cent later firmed up to the high of 9.50 per cent and closed at 9.10-9.30 per cent, higher from the previous close of 8.80-9.00 per cent.

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