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Rupee plunges to all-time low on Indo-Pak tension

• Rs 43.61 vs $
• Rs 43.82 vs euro
• Rs 72.15 vs pound
• Rs 41.55 vs yen (100)

The incidents of border clash between India and Pakistan over the weekend sent shock waves through the inter-bank foreign exchange market with rupee finding its lowest-ever level at Rs 43.6150 against a US dollar amidst volatile trading today.

The rupee opened a bit lower at Rs 43.58/59, came under pressure on news of fresh developments at the Indo-Pak border and continued to fall on all-round dollar buying. The Indian unit touched an intra-day low of Rs 43.65/66, before closing at Rs 43.6050/6150 per dollar.

The State Bank of India came to the rescue of the Indian rupee when it fell to the intra-day low of Rs 43.65/66 and brought back its value against dollar by resorting to dollar selling, dealers said.

The SBI's dollar selling helped the rupee to stage a moderate recovery at Rs 43.6050/6150 from the lowest level of Rs 43.64/65, they said.

Earlier, it was on August 1998 that the rupee touched an all-time intra-day low of Rs 43.68/70, but recovered partially during the course of trading and closed at Rs 43.55/58 per dollar. On August 20, 1999, it closed at 43.57, which has been the all-time closing low till today.

Tracking the spot market, forward premia also moved up on paying pressure. The sixth month and yearly annualised premia closed higher at 3.21 per cent and 3.30 per cent respectively as compared to 3.13 per cent and 3.20 per cent of the previous day.

Cash/spot and cash/tomorrow finished at 1.00-1.25 paise and 0.25-0.37 paise respectively. The month-wise premium in paise were: January 1-2, February 13-14, March 25-26, April 36-37, May 47-48 and June 59-60.

Meanwhile, the Reserve Bank of India fixed the reference rate for US dollar at Rs 43.64 as against Rs 43.58 of the previous day.

In the cross currency segment, the rupee closed marginally higher against euro at Rs 43.82 (44.19) while it remained steady against pound sterling at Rs 72.15 and yen at Rs 41.55.

At the domestic money market, call rates ruled in a narrow range between 7.95-8.20 per cent and closed at 7.00-8.10, marginally lower from 8.10-8.15 per cent the previous day.

UNI

The rupee could touch 43.80 to US $ by March 2000

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