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Rupee dips low as SBI makes heavy dollar purchases

The State Bank of India's heavy dollar purchases during the later part of the day forced the rupee to dip lower against the US greenback by about four paise over previous week's close of 36.2250/2350 in the relatively active interbank foreign exchange market on Monday.

After an initial steady trend, the rupee hovered within the range of Rs 36.2250/2350 as there was virtually no demand. Later in the day, however, the SBI entered the market and made good dollar purchases, pushing the rupee down. At the fag end, the rupee settled down moderately lower at Rs 36.2650/2750 levels. The SBI bought dollar in the range of Rs 36.26/27, a forex dealer said.

Meanwhile, the annualised forward premia, which initially came down by 12 to 15 paise due to some receiving pressure, settled almost at the steady levels compared to Friday's closing. This was due to some month-end commercial demand, a dealer said.

The monthly premia were quoted at: October 0.5-1.5 paise premium followed by November 13-15, December 31-33, January 48- 51, February 67-70, March 85-88, April 103-106, May 121-126 and June 139-144 paise premia.

On the otherhand, the overseas market was relatively quiet with the pound sterling appreciating against the US dollar, expecting some interest rate hike in the European market favouring pound sterling, a dealer at the foreign bank opined. Otherwise the dollar was reported steady against various other European currencies, he said.

Elsewhere, the Reserve Bank of India fixed the reference rate at Rs 36.23 per dollar for Monday.

UNI