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Heavy corporate $-buying weakens rupee further by three paise; Rs 43.07

The rupee continued its weakening trend on heavy corporate dollar demand spurred by the border crisis and slid further by three paise against the greenback in a fairly active interbank foreign exchange market today.

Opening nearly steady at Rs 42.03/06, the rupee remained around that level till noon as the market witnessed moderate activity in the morning with almost matching dollar demand and supply.

But renewed dollar buying by corporates and banks later in the afternoon following rumours of fresh air strikes by Pakistan, put pressure on the rupee at the fag end.

The Indian unit closed lower at Rs 43.06/07, as compared to 43.03/04 of the previous day, losing its value by three paise. Dealers said the market was more or less quiet till afternoon, but as some foreign banks purchased huge amount of dollars at the fag end, the rupee eased marginally.

State Bank of India has not actively participated in the market today, they added.

The rupee has crashed by more than 30 paise during the last fortnight from Rs 42.74/75 on May 25 to Rs 43.06/07 of today as the Indo-Pak border skirmish had caused panic in the forex market.

Forward market witnessed relatively dull activity and premia, after moving in a narrow range, came down further on scattered receivings. The sixth month and yearly annualised premia closed marginally lower at 5.10 and 5.97 per cent respectively as compared to 5.22 and 6.02 per cent respectivley of the previous day.

Cash/spot and cash/tomorrow premia ended at 0.75-1.00 paise and 0.25-0.50 paise respectively. The month-wise premia in paise were: June 8-9, July 24-26, August 42-44, September 62-64, October 82-84, November 102-104, December 122-124, January 151-153, February 175-178, March 201-204, April 224-227 and May 247-250.

Meanwhile, the Reserve Bank of India has revised the reference rate for US dollar by seven paise at Rs 43.05 as against Rs 42.98 of the previous day.

In the cross currency, the rupee weakened agains euro and Japanese yen while it remained nearly steady against pound sterling. Rupee ended lower against euro at Rs 45.12 (44.67), yen at Rs 36.13 (35.47) and sterling at Rs 69.05 (69.03).

In the domestic money market, the call rates ruled in a narrow range of 7.90-8.00 per cent throughout the day and closed steady at 7.95--8.00 per cent.

UNI

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