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|September 23, 1998||
Month-end buying makes market volatile; rupee sheds five paise, Rs 42.54/55
The Indian rupee depreciated by five paise against the greenback for first time in the current week in a volatile interbank foreign exchange market today.
The rupee opened slightly lower at Rs 42.51/52 against its previous close of Rs 42.49/50. The Indian currency slid further throughout the day to touch the day's low of Rs 42.56/57 in the morning on heavy buying support for dollar from corporates and banks coupled with month-end demand for dollar, a leading dealer said.
In the fag-end session, rupee recovered by two paise and closed at Rs 42.54/55. State Bank of India also bought dollars.
Dealers said that the reversal in stand by the International Monetary Fund yesterday on free capital flows affected the forward dollar premia, which in turn affected the spot dollar too.
The Reserve Bank of India fixed the reference rate for US dollar at Rs 42.54, three paise higher against the previous fix of Rs 42.51.
The cash-to-spot trades were done higher at 0.50-0.75 paise premium and cash-to-tomorrow was steady at 0.25-0.50 paise premium. Half-yearly and yearly premia were closed higher at 8.69 per cent and 8.90 per cent respectively.
The monthly forward premium in percentage for the first month was quoted higher at 7.70, for third month at 8.25 and for six month 8.69. The premium in paise were quoted also higher at 2-3 for September, 30-33 October, 58-63 November, 86-91 December, 121-126 January, 152-157 February, 183-188 March, 218-223 April, 253-258 May, 288-293 June, 321-326 July and 351-356 August paise premium.
In the overseas, dollar was quiet against pound sterling, weakened against deutsche mark and strengthen against Japanese yen. In the cross currency section, rupee was traded between 71.31 to 41-48 against a British pound, at Rs 25.26 to 25.20 against deutsche mark and Rs 31.32 to 31.14 against Japanese yen. The merchant booking was done nominally.
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