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Rupee makes smart recovery on renewed $-selling ; up six paise, Rs 42.52/53

The rupee staged a smart recovery of about six paise against the greenback on renewed dollar sales and slack demand at the interbank foreign exchange market today.

Opening a bit lower at Rs 42.58/59, which proved the low of the day, the rupee showed some signs of appreciation as the corporates started off-loading the greenback which accumulated during the new year eve and weekend holidays coupled with subdued dollar demand. The Indian unit closed at Rs 42.52/53 as against Rs 42.5750/5850 of the previous day, gaining about six paise.

The euro, the common currency of the European Union, which started trading in the Indian interbank forex market on Monday, remained range-bound with a few dealings of nominal amount, dealers said.

After moving up to Rs 50.33, the euro closed at Rs 50.26, slightly lower from the previous day's close of Rs 50.20. Against the US dollar, the euro ranged between 1.1800-1830 level before closing at 1.1815-20.

Forward premia came down by 3-4 paise in the absence of paying pressure and good receiving. The sixth-month annualised premium ended lower at 7.05 per cent and yearly at 8.16 per cent.

Cash/spot and cash/tomorrow ended at 1.00-1.25 paise and 0.50-0.75 paise premium respectively. The month-wise premia in paise were: January 10-12, February 28-31, March 51-54, April 80-84, May 110-114, June 139-143, July 171-175, August 201-206, September 236-240, October 268-272, November 301-306 and December 334-340.

The rupee ended nearly steady against pound sterling at Rs 70.37 while it closed lower against the yen at Rs 38.25.

Meanwhile, the Reserve Bank of India fixed the reference rate for US dollar at Rs 42.56 against Rs 42.51 of the previous day.

At the Tokyo market, the US dollar dropped to its lowest level in almost 19 months today amid growing pessimism about the outlook for the American economy. Dollar bought 111.54 yen, down 2.32 yen from late Monday. The dollar last traded below the 112 yen level in June 1997.

In the domestic money market, the call money rates eased on easy liquidity and lower demand. It closed lower at 8.75-9.00 per cent against 9.00-9.10 per cent of the previous day.

UNI

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