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Rupee slips sharply against dollar, loses 10 paise

The Indian rupee continued to be under pressure due to the Indo-Pakistan conflict and slid sharply by 10 paise to its lowest level since August 19, 1998, against the US greenback following heavy corporate dollar demand at the inter-bank foreign exchange market today.

The forward dollar premia also dropped considerably from their previous levels.

The currency opened at 43.17/18 to the dollar, sharply lower from the previous close of 43.0450/0550, and remained under pressure throughout the day, dealers said.

There was good business activity during the day, a senior forex dealer at Mecklai and Mecklai said, and added that the rupee would be under pressure until the Kargil issue is resolved. A lot of import covering is being done by importers, he said.

The rupee declined gradually during the course of trading , another dealer said. The State Bank of India made considerable dollar purchases and brought the rupee back to the Rs 43.10 level, but the currency finally ended at 43.1450/1525 to the dollar from Friday's finish of 43.0450/0550.

The six-month annualised and one-year premia closed sharply higher, at 5.36 and 6.15 per cent from the previous levels of 5.10 and 5.94 per cent, dealers said.

In cross-currency deals, the rupee gained smartly against the Euro and Japanese yen. However, it dropped sharply against the pound sterling. The rupee ended higher at 45.09 per Euro from the previous close of 45.20, and finished at 35.82 against the Japanese yen from Friday's close of 36.39. The Indian unit dropped considerably against the British pound and closed at 69.60 per pound from the previous close of 69.17. Elsewhere, the RBI has fixed the reference rate for the US dollar at 43.13 as against the previous fix of 43.06.

UNI

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