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SBI's late withdrawal helps rupee to recover; up four paise, Rs 42.35/36

The rupee recovered and ended four paise higher against the greenback on the interbank foreign exchange market today.

The currency opened marginally lower at Rs 42.41.42, moved further downwards in the morning as banks and corporates especially State Bank of India started heavy dollar buying. It touched the day's low of Rs 42.46/47 in the mid-morning and continued to rule at the lower level till the intra-day.

However, in the afternoon, the rupee staged a smart recovery as the dollar was in less demand while corporates and banks started selling it. After hectic dollar purchases in the morning, SBI stopped its dollar buying spree and preferred to stay away from the market in the afternoon, dealers said.

The rupee reversed from its intra-day low and started moving up and finally towards the fag end and closed at Rs 42.35/36 against the previous close of Rs 42.39/40, registering a gain of four paise.

Dealers said that most of the major European currencies today rose against the US dollar. Forward premia, which shot up in the intra-day, later came down sharply at close. On an average, the premia were shot up by ten paise in the morning and came down sharply by about 15 paise at close. The third month, sixth month and yearly premia were quoted lower at 7.20 (7.26), 7.97 (8.29) and 8.70 (8.90) per cent respectively.

Near forwards premia came down by about 2-5 paise while far forwards were lower by 7-9 paise. Cash/spot business and cash/tomorrow were done at 1.00-1.50 paise and 0.50-0.75 paise premia respectively. The month-wise premia in paise were: October 15-17, November 38-42, December 64-68, January 94-98, February 124-128, March 153-158, April 189-194, May 222-227, June 256-261 and July 289-294.

Meanwhile, the Reserve Bank of India revised the reference rate for US dollar five paise higher at Rs 42.45 against Rs 42.40 of the previous day.

In the overseas market, the pound sterling, deutsche mark and Japanese yen strengthened against the US dollar. The rupee become stronger against sterling, DM and yen and quoted for sterling at Rs 71.61 (71.34), for DM Rs 26.23 (25.89) and yen at Rs 33.95 (31.94).

In the domestic market, the call money interest rates, ruled in the range between 7.75 and 8.10 per cent today.

UNI