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Political news makes market volatile; rupee recovers after early loss; Rs 42.45/46 vs $

The rupee ended four paise higher against the greenback at a fairly volatile interbank foreign exchange market today.

Opening at Rs 42.51/52, the rupee came under pressure due to discouraging political news, which caused heavy corporate dollar covering. The Indian unit further slid to the low of Rs 42.52/53 in the morning.

Later, the panic cooled down and banks, particularly State Bank of India, started offloading the US currency which helped the rupee to recover the morning loss and ended four paise higher at Rs 42.45/46 against Rs 42.4900/4950 the previous day.

Forward premia opened higher on paying pressure, but later eased on good receiving. Near-forward premia moved down by one paise while far-forwards ended 2-3 paise lower. The six-month annualised and yearly premia closed a bit lower at 7.11 per cent and 7.65 per cent respectively.

Cash/spot ended at 1.00-1.25 paise premium while cash/tomorrow finished at 0.50-0.75 paise premium. The month-wise premia in paise were: February 5-6, March 27-30, April 54-57, May 77-80, June 106-109, July 132-135, August 160-163, September 188-191, October 216-219, November 246-249, December 276-279 and January 305-308.

Meanwhile, the Reserve Bank of India has maintained the reference rate for US dollar at Rs 42.49.

The rupee strengthened against Japanese yen, weakened against euro and was nearly steady against pound sterling. It ended at Rs 35.77 (36.16) against yen, against the euro at Rs 47.72 (47.55) and at Rs 69.39 (69.35) against the pound.

In the domestic money market, the call rates hovered between 8.75-9.05 per cent during the day and ended slightly lower at 8.75-8.90 per cent.

UNI

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