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Rupee slides two paise down to US $; Rs 43.17

The rupee surrendered the initial gains and ended two paise lower against the US greenback on a fairly active interbank foreign exchange market today.

The Indian currency opened higher at Rs 43.11/13 to the US dollar from the previous day's close of Rs 43.14/1450. However, heavy dollar covering by banks and corporates at that lower levels pushed it down to Rs 43.16/17 later in the morning and hovered around that level throughout the day.

The rupee dipped to the low of Rs 43.17/18 in the afternoon before closing at Rs 43.16/17, two paise lower from the previous close of Rs 43.14/1450. Dealers said the market sentiment continued to be nervous due to the border crisis and corporates bought dollars whenever it eased a bit.

Forward dollar market, however, witnessed lower activity as compared to the spot market. Monthly premia moved in a very narrow range and ended a bit lower on scattered receivings. The sixth month and annualised premia closed at 4.98 per cent and 5.90 per cent respectively, slightly lower from the previous day's close of 5.03 per cent and 5.92 per cent respectively.

Cash/spot and cash/tomorrow finnished at 1.00-1.25 paise premium and 0.50-0.65 paise premium respectively. The month-wise premia in paise were: June 2-4, July 19-20, August 37-39, September 54-56, October 73-74, November 92-93, December 112-114, January 141-143, February 165-167, March 191-193, April 215-217 and May 238-240.

Meanwhile, the Reserve Bank of India fixed the reference rate for US dollar at Rs 43.17 as against Rs 43.15 of the previous day.

In the cross currency, rupee rose against the Japanese yen, fell against euro while it remained steady against pound sterling.

Yen ended at Rs 35.38 (36.19), euro at 44.70 (44.44) and sterling at Rs 68.67 (68.68).

At the interbank call money market, the call rates opened marginally higher at 8.50-8.75 per cent, and further firmed up to 8.90 per cent level, as the system witnessed slight liquidity tightning due to the outflow of Rs 50 billion on government security auction last week coupled with tax outflows of this week.

The rates ended at 8.60-8.75 per cent, a bit higher from the previous close of 8.40-8.60 per cent.

In Tokyo market, the US dollar was sharply higher against the yen early Monday amid speculation the central bank bought the greenback to stem the Japanese currency's rise.

The dollar traded at 120.38 yen in early trading, up 1.06 yen from late Friday in Tokyo but below its late Friday New York level of 120.44 yen. The euro was quoted at 126.44 yen, up from 122.73 yen late Friday in Tokyo.

UNI

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