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Market shudders as US flays India's N-doctrine; rupee dips six paise to 43.49 vs $

• Rs 43.49 vs $
• Rs 45.75 vs euro
• Rs 69.67 vs pound
• Rs 39.00 vs yen (100)

The Indian rupee closed sharply lower by six paise agains the greenback at Rs 43.4850/4950, on heavy corporate dollar demand, at an active interbank foreign exchange market today.

The rupee opened lower at Rs 43.43/45, came under pressure on heavy corporate dollar demand, continued to ease during the day and closed lower at Rs 43.4850/4950, as against the previous day's close of Rs 43.42.43, losing seven paise.

Dealers said the forex market which remained dull for the last three days, become active today as the US criticism of India's draft nuclear doctrine created some panic among the corporates.

Corporates and banks, including State Bank of India started buying dollars. IDBI also reportedly puchased considerable amount of greenback. Further, disinvestment in the capital market by foreign institutional investors also put pressure on the rupee, dealers added.

Tracking the spot market, forward premia also moved up on paying pressure. Near forwards inched up by one paisa while far forwards rose by 3-4 paise. The sixth month and yearly annualised premia ended higher at 4.90 per cent and 5.10 per cent as compared to 4.74 per cent and 5.00 per cent of the previous day.

Cash/spot and cash/tomorrow finished slightly higher at 2.25-2.50 paise and 0.50-0.75 paise respectively. The month-wise premium in paise were: August 6-8, September 22-24, October 40-42, November 55-57, December 72-73, January 94-97, February 110-111, March 130-132, April 148-150, May 167-169, June 187-189 and July 206-208.

Meanwhile, the Reserve Bank of India fixed the reference rate for US dollar at Rs 43.47 as against Rs 43.42 of the previous day.

In the cross currency, rupee weakened sharply against yen while it remained nearly steady against pound sterling and euro. It ended against yen at Rs 39.00 (38.36), sterling at Rs 69.67 (69.67) and euro at Rs 45.75 (45.71).

At the interbank call money market, call rates hovered around ten per cent level and closed steady at 9.90-10.00 per cent.

In Tokyo, the dollar was quoted at Rs 111.68/71 yen, down from Rs 111.82/92 late in New York on Wednesday.

UNI

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