Rupee Loses More Ground, Slips To 35.80

According to dealers, there was increased demand for dollars in the market, adding that the lack of adequate supply of dollars drove down the Indian currency.

Resuming the day at the overnight finish of 35.74-35.77, the rupee dipped to 35.77- 35.79 on sustained dollar purchases. However, brisk business was reported even when the rupee-dollar rates were quoting at 35.80. The State Bank of India, a key player in the forex market, was reportedly buying spot dollars. It was believed to have picked up between $30 million and $40 million.

Dealers said the market, which is already shallow, was being moved by relatively small dollar purchases. Tension gripped the market on the issue of oil imports, in the wake of the US onslaughts on Iraq.

 

Corporates and banks thus resorted to frenetic dollar purchases. The rupee closed between 35.80 and 35.81, disclosing a loss of 6 paise over Wednesday's figures. Forward dollar premiums also declined as the markets opened in the morning. The monthly premium rates went up on account of the panic in the market.

Importers who booked forward to cover their exposures. Monthly premiums at the close of trading were marginally higher over Wednesday's figures. The rates were 9/12 paise for September, 40/45 paise for October, 70/75 paise for November, 104/109 paise for December, 144/149 paise for January, 175/180 paise for February and 203/208 paise for March. Premia for March touched 210 paise temporarily. The annualised rates were unchanged, quoting between 10.2 per cent and 10.4 per cent.