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Rupee ends week with further fall

Despite Union Finance Secretary Montek Singh Ahluwalia's rebuttal of certain news reports that the government favours the rupee at around Rs 38.50 per dollar levels didn't soothe matters in the forex market as the rupee's week-long tumble continued unabated. Desperate client covering by banks and dollar demand by some corporates didn't allow the rupee to recover, despite massive intervention by the Reserve Bank of India.

The rupee declined further at the interbank foreign exchange market crossing the Rs 36.60 mark against the dollar during the day in volatile trading, characterised by heavy selling of the American greenback by the Reserve Bank of India and panicky short covering by corporates and banks.

The rupee opened at Rs 36.54/56 and was down to Rs 36.57/58 just after the mid-session. Dollar bidding by State Bank of India in the afternoon weakened the rupee even further to Rs 36.61.

The RBI intervened in the market after 1500 hours and sold heavily in both spot and forward sections. According to forex dealers, the apex bank was selling prominently for October and November. The RBI has reportedly sold US dollar 175 million on Friday.

The rupee eventually ended at Rs 36.57/59, showing a net loss of three paise over Thursday.

The RBI's dollar selling in the market had only a marginal impact in checking the rupee's fall, dealers opined.

Cash spot closed at 0.5-1.00 paisa premium, while tom spot ended at a discount of 0.25 paisa.

The forward premia firmed up sharply due to paying pressure from corporate houses, importers, and commercial banks covering for their clients.

The monthly forwards (in paise) were 18-21 for September, 45-48 for October, 70-73 for November, 98-101 for December, 122-125 for January, 142-145 for February, 169-173 for March and 192-197 for April.

The six -month annualised premia closed at 8.31 per cent.

Trading in the overseas markets was quiet and dull with no significant movements reported.

The Deutsche mark closed at Rs 20.15 and the Japanese yen at Rs 30.23 per 100 yen.

Elsewhere, the RBI fixed the reference rate at Rs 36.56 per dollar as against Rs 36.54 on Thursday.

UNI