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Rupee steadies after losing ground

The rupee, after touching a record low of 42.42/45 in the intra day trading, later recovered partially and closed steady in a volatile trading at the Interbank foreign exchange market today.

Opening slightly higher at 42.24/27, the rupee continued to sink and touched a new record low of 42.42/45, following hectic dollar-buying by corporates and banks anticipating a further fall in the rupee in the near future.

Major market player State Bank of India which stayed away from the market allowing the rupee to depreciate about 43 paise in a single day yesterday, however, came forward today to rescue the falling rupee and selling a substantial number of dollars at the lower level at the end of trading, helping the rupee regain ground to close at 42.20/25, almost steady against the previous close of Rs 42.22/24.

Most deals were conducted at 42.35-42.44 levels, leading dealers said. Forward premiums eased slightly at close after ruling at a higher level earlier in the day.

The sixth month annualised and yearly premiums were quoted lower at 9.44 per cent and 9.55 per cent respectively as against the 10.02 and 10.30 per cent of the previous day.

Imports were active in the market and conducted booking in near and far forwards in the morning due to which the premiums reported some rise in the morning. However, at the fag end, the premiums also came down as the rupee steadied. Cash/spot business was conducted at 0.75-1 paise premium while cash/tom was done at 0.35-0.65 paise. The monthwise premium in paise were: June -- 17-19 paise, July -- 54-58 paise, August -- 84-89 paise, September -- 119-122 paise, October -- 152-156 paise, November -- 14-188 paise, December -- 220-224 paise, January -- 257-262 paise, February -- 293-298 paise, March -- 331-336 paise, April -- 359-365 paise and May -- 389-397 paise.

The rupee remained almost steady against the pound sterling (Rs 69), deutschemark (Rs 23.7) and Japanese yen (Rs 30.1 for every 100).

Meanwhile, the Reserve Bank of India maintained its reference rate for the US dollar at Rs 42.15.

UNI