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Rupee holds its own against dollar

The Indian currency, after seeing an initial weakness of Rs 39.06/09 against the US greenback, recovered marginally during the later part of the day to settle at Rs 38.90-95 due to heavy export selling coupled with the State Bank of India's active dollar selling in a two-way trading at the active interbank foreign exchange market today.

The rupee opened almost steady at Rs 38.80-85 as compared to Friday's closing, saw a day's low of Rs 39.06-09 due to heavy import covering coupled with the State Bank of India's active dollar buying and later during the day regained back to finally settle down at Rs 38.90-95 following heavy export covering with the SBI's heavy dollar selling pressure, the forex dealers said.

According to the forex dealers, the rupee had come under pressure due to the heavy import covering and could recover on good export booking. The State Bank of India showed two-way interest which also had an impact of the moving of the demand and supply curve of the currency, they remarked.

On the other hand, the forward premiums also rose sharply by about 10 to 12 paise over Friday's closing levels due to good import covering while the cash to spot dollar was quoted at 0.75 to 1.75 per cent premia.

The monthly premium were Dec 20-21, Jan 48-50, Feb 74-76, Mar 104-106, Apr 124-129, May 143-146 and Jun 164-169 paise premium respectively.

Meanwhile, in the overseas market, the dollar was reported bullish against all major currencies.

Elsewhere, the Reserve Bank of India fixed the reference rate at Rs 38.90 per dollar as against Friday's fix of Rs 38.65.

UNI