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Rupee recovers 18 paise to US $; Rs 42.93

The Indian rupee which had came under severe pressure for the last couple of days due to increased tension on the Indo-Pak border staged a smart recovery of about 18 paise at Rs 42.91/93 following unwinding of long-term positions by market players coupled with State Bank of India's dollar selling at the interbank foreign exchange market today.

The currency opened at Rs 43.02/05 per dollar and touched the day's low of Rs 43.07 during the course of trading. When the State Bank of India entered the market and started issuing, the rupee was quoted at Rs 43.05/08 while the market heard unofficial quotes at Rs 43.05/25, dealers said.

The rupee was quoted below the Rs 43.00 level following unwinding of long-positions in view of last day of the week , dealers said. They added that it has recorded a loss of 36 paise in the last two trading sessions against the US dollar.

With the squaring up of positions by market participants, the rupee was quoted at Rs 42.90 per dollar in the late afternoon trade.

Finally, the Indian unit ended at Rs 42.91/93 per dollar, showing a net gain of 18-19 paise per dollar from the previous close of Rs 43.10/11 per dollar.

The six-month's annualised forward premia also came down sharply to 5.96 per cent from yesterday's level of 6.01 per cent.

Today's recovery of the Indian rupee was unexpected to the marketmen, since they were of the view that rupee is likely to touch a new level of Rs 43.20/25, a chief forex dealer at the leading commercial banks said.

The dealer further said that the players preferred to unwind their long-term positions in wake of uncertainty but it subsequently helped rupee to gain sharply against the dollar.

Cash to spot business was done higher at 2.5-3.00 paise premium.

The monthly forward premia in paise were quoted at June 20-23, July 40-45, August 60-65, September 82-87, October 104-109, November 125-130, December 140-154, January 178-188, February 204-215, March 230-240, April 255-265 and May 276-286 respectively.

The Indian currency, however, slipped further against the major international currencies. It fell by 11 paise to Rs 68.71 per pound, while it dropped by 7 paise to Rs 44.96 against euro and declined sharply by 34 paise to Rs 35.52 against Japanese yen.

Elsewhere, the Reserve Bank of India has fixed the reference rate for the US dollar at Rs 42.99 per unit, nine paise lower from the previous day's rate of Rs 42.90.

UNI

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