Re Slips On Corp Demand, Asian Trend

FOREX REPORT

The rupee was off an intra-day high of 42.70, but closed weaker against the dollar at 42.66-68 compared with 42.60-62 on Friday.

Dealers said the Indian currency weakened on increased corporate demand following developments in the Asian markets and rating agency DCR Duff & Phelps downgrading India yesterday.

The forward rupee also slid in tandem with spot, they added. Dollar premiums closed at 4.47 per cent for one month (4.10 per cent on Thursday), 6.50 per cent for three months (5.82 per cent), 7.65 per cent for six months (7.30 per cent), and 8.65 per cent for 12 months (8.62 per cent).

 

Spot rupee opened at 42.63-66 amid nervous sentiment. It slipped to 42.70 in the first half-hour of trade on corporate buying.

"The market was following the yen's fall to 146.5, its eight-year low, and the Chinese central bank's intervention," one dealer said. The RBI's mid-day reference rate was 42.69 compared with 42.55 on Friday. Cash-tom was 0/.25 paise, tom-spot 0/.25 paise, and cash-spot 0/.5 paise.

In the forward market also corporate covering caused the rupee premiums to weaken, dealers said. Premiums (in paise) closed at: August - 7-9; September - 27-30; October - 56-59; November - 86-89; December - 118-121; January - 149-153; February - 179-184; March - 219-223; April - 253-257; May - 288-293; June - 320-325; July - 352-357.

In the crosses, the rupee closed at 69.53 against the pound, 23.95 against the mark, and 29.13 per 100 yen.