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Adequate $ supply helps rupee to gain two paise; Rs 42.50/51

The rupee appreciated further by two paise against the greenback while the forward premia crashed on good receiving pressure at the interbank foreign exchange market today.

Opening marginally higher at Rs 42.51/52, the rupee rallied up to Rs 42.48/49 levels in the morning, as the market witnessed good dollar supply and slack demand. Later, as some banks bought dollars at a lower level, the rupee moved down slightly from its morning high and closed at Rs 42.50/51 as against 42.52.53 of the previous day.

Forward premia crashed in the absence of paying pressure. Near forwards moved down by by 4-5 paise while far forward premia crashed by 20-30 paise. The sixth month annualised and yearly premia ended lower at 6.54 per cent and 7.45 per cent respectively.

Nominal activity took place in rupee/euro, dealers said and added that more than 80 per cent of the export/import dealings were in dollar. ''Corporates are adopting a wait-and-watch attitude towards the euro, as it is new and its flexibility to be watched,'' they said.

The rupee strengthened against the euro and Japanese yen and ended against the euro at Rs 49.94 (Rs 50.25) and yen at Rs 37.98 (Rs 38.25). However, the rupee closed a bit lower against pound sterling at Rs 70.46 (70.37).

Cash/spot and cash/tomorrow ended at 0.75-1.00 paise and 0.25-0.50 paise premium respectively. The month-wise premia in paise were: January 7-10 (10-12), February 23-26 (28-31), March 44-47 (51-54), April 73-76 (80-84), May 99-102 (110-114), June 126-131 (139-145), July 156-161 (171-175), August 185-190 (201-206), September 214-219 (236-240), October 244-249 (268-272), November 274-279 (301=306) and December 304-309 (334-340).

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

In the domestic money market, the call rates ended at 8.60-8.75 per cent on easy liquidity and lower demand.

In Tokyo, the dollar gained against the yen today when investors brought greenbacks after recent sharp declines. The dollar bought 112.09 yen in midday trading, up 00.57 yen from late Tuesday.

UNI

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