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Kargil effect: heavy dollar-buying; rupee loses four paise, Rs 43.05 to $

The rupee weakened by four paise against the greenback on heavy corporate dollar demand spurred by renewed developments at the Indo-Pak border, at an active interbank foreign exchange market today.

The rupee opened nearly steady at Rs 43.00-/02, came under pressure on heavy corporate dollar demand as confirmation by Pakistan's Inter-Services Intelligence's public relations directorate, about the presence of Pakistani troops in the Kargil and Drass sectors, unsettled the marketmen.

Rupee witnessed a gradual weakening and touched a low of Rs 43.08 before closing at Rs 43.0450/0550 as against Rs 43.050/150 of the previous day's close, losing four paise.

State Bank of India which was buying the dollar during the last two days, sold considerable amount of the greenback today, dealers said.

Forward market also witnessed good activity today, and premia moved up on paying pressure. Near forwards edged up by one paisa while far forwards rose by four paise. The sixth month and yearly annualised premia ended marginally higher at 5.10 and 5.94 per cent respectively as compared to 5.00 and 5.84 per cent of the previous day.

Premiunm on cash/spot and cash/tomorrow ended at 1.25-1.50 and 1.00-1.25 paise respectively. The month-wise premia in paise were: June 7-8, July 23-25, August 40-42, September 58-61, October 78-80, November 99-101, December 119-121, January 149-152, February 174-177, March 198-202, April 222-225 and May 245-247.

The Reserve Bank of India revised the reference rate for US dollar by four paise at Rs 43.06 as compared to Rs 43.02 of the previous day.

In the cross currency, the rupee weakened against pound sterling, euro and Japanese yen. Sterling ended at Rs 69.17 (68.94), euro at Rs 45.20 (44.98) and yen at Rs 36.39 (36.09).

At the interbank call momey market, the call rates opened almost steady at 8.00-8.05 per cent, ruled in the range of 8.00-8.25 per cent and closed at 8.10-8.25 per cent, a bit higher from previous close of 8.00 per cent.

UNI

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