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Rupee falls ten paise to US $ on heavy dollar buying; Rs 42.95

The Indian rupee reacted sharply and lost by about ten paise against the greeback on corporate dollar demand coupled with border-tension at the interbank foreign exchange market today.

The currency opened at Rs 42.83/84 and gradually declined on increased demand from corporates. State Bank of India's dollar purchases on behalf of Indian Oil Corporation, coupled with corporate import covering pushed the rupee down to Rs 42.97 per dollar during the course of day.

However, the rupee closed at Rs 42.94/95 per dollar towards the fag end of trading, showing a net loss of ten paise from the previous day's close of Rs 42.84/85 per dollar.

The forward premia also rose considerably compared to their previous levels.

Dealers attributed the rupee's fresh fall to the three major factors: heavy demand on account of IOC's import covering, yesterday's memorial holiday in the US and the UK markets, and fresh incidents of air-strikes and reported entrance of two Pakistani planes into Indian terriotory.

The sixth month's annualised premia rose to 5.42 per cent from the previous day's level of 5.36 per cent.

The cash-spot business was done at 0.75-1.00 paise premium while cash-tomorrow carried out at 0.25-0.50 paise premium.

The monthly premia in paise were quoted at June 14-16, July 32-34, August 52-57, September 92-94, October 113-116 and November 136-139 respectively.

The rupee closed steady against euro at Rs 44.78 from the previous close of Rs 44.78, at Rs 68.82 against pound sterling from the previous close of Rs 68.63 and at Rs 35.47 against the Japanese yen from yesterday's close of Rs 35.25.

The Reserve Bank of India has fixed the reference rate for the US dollar at Rs 42.87 from the previous day's rate of Rs 42.84 per dollar.

UNI

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