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Rupee declines further

The rupee declined against the US dollar by 24 paise on heavy demand from banks and corporates in the early half, but trading sentiments stabilised in the post mid-session period enabled the rupee to make a smooth landing at Rs 38.30/35 at the fag end.

The rupee opened at Rs 38.08-12 at the interbank foreign exchange market. It plummeted to Rs 38.35-38 on covering by banks coupled with speculative interest. The Reserve Bank of India intervened in both spot and forward section in a nominal way helping the rupee to strengthen slightly to close at Rs 38.30-35 per US dollar.

According to dealers, the RBI was sold mostly for the months of April and May 1998 in the forward section.

Cash/spot closed at 0.25--0.50 paise premium, tom/spot at level and cash/tom at level--0.125 premium.

The monthly premiums (in paise) were 18-23 for December, 40-43 for January, 60-63 for February, 81-84 for March, 100-103 for April and 120-123 for May. One-year forward ended at 243-248. The six-month annualised premia was 6.41 per cent.

Dealers said that trading in overseas markets was quiet with negligible movement noticed in the major currencies.

Back home, the pound sterling closed at Rs 64.75, yen at Rs 30.25 (per 100) and mark at Rs 22.05.

Elsewhere, the RBI fixed the reference rate at Rs 38.35 per US dollar compared to the previous fix of Rs 38.39.

UNI