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Rupee fails to surge on early gains; down three paise, Rs 42.39/40

After showing some initial gains in the morning, the Indian rupee ended lower by about three paise against the US greenback on fresh dollar demand, on an active interbank foreign exchange market today.

The rupee opened higher at Rs 42.33/35, and ruled almost at that level for quiet some time in the morning on good export covering and lower dollar demand. But it started moving down from the mid-session on heavy dollar demand from corporates and banks at the lower levels.

The major market player State Bank of India which stayed most part of the day, entered the market towards the closing time and purchased good amount of dollars, pushing the rupee down to close at Rs 42.39/40 against the previous close of Rs 42.36/38.

Forward premia , which were lower in the morning, moved up towards end on paying pressure and quoted slightly higher. Near forwards moved up by 2 to 5 paise while far forwards were higher by 10-13 paise. The 3rd month, 6th month and yearly premia were quoted higher at 7.26 per cent (7.18), 8.29 per cent (7.47) and 8.90 per cent (8.38 per cent) respectively.

Cash/spot at close were quoted 0.65-0.85 paise premium while cash/tomorrow was at 0.25-0.50 paise premium. The month-wise premia in paise were: October 15-18, November 40-44, December 65-70, January 97-102, February 128-133, March 162-167, April 195-200, May 230-235, June 265-270 and July 297-302.

Meanwhile, the Reserve Bank of India has revised the reference rate for US dollar four paise lower at Rs 42.40 against the previous rate of Rs 42.44.

In the cross-currency market, the rupee slightly strengthened against pound sterling and Japanese yen while it remained nearly steady against the deutsche mark and quoted for sterling at Rs 71.34 (71.83), for dm at Rs 25.89 (25.87), and for yen at Rs 31.94 (31.39).

In the domestic market, the call money interests, after opening marginally higher at 8.00-8.10 per cent, ruled in the same range most part of the day, before easing to 7.75-8.00 per cent at close.

UNI