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Russian crisis affects market; rupee down four paise, Rs 42.53/54

The Indian rupee weakened further by four paise against the US dollar due to month-end demand on the interbank foreign exchange market in Bombay today.

The greenback opened nearly steady at Rs 42.49/50 as against previous day's close of Rs 42.50/52. On moderate demand from corporate sectors and commercial banks to meet their month-end remittances, it moved gradually up to Rs 42.55/56 during the intra-day trading session and was seen hovering at the same level for quite some time. Finally, it closed at Rs 42.53/54, weakening by four paise.

However, the forward premiums quoted slightly higher, near forwards were quoted by 2 to 3 paise higher while farforwards were quoted 10 to 15 paise higher than the previous close, leading forex dealers said.

The continuous economic crisis and political instability in Russia had impact on cross currency market, which witnessed a volatility.

The pound sterling was quoted at Rs 70.10, deutsche mark at Rs 23.78 and Japanese yen at Rs 29.77. Germany is the highest investor in Russia and due to economic crisis, Germany was selling and Japan was buying so that yen becomes stronger and deutsche mark weaker.

Being a reporting Friday, the interbank call money interest rate was quoted at 1.00-2.00 per cent. Dealers were expecting high call rates during the next fortnight.

Meanwhile, the Reserve Bank of India has fixed the reference rate at Rs 42.54 as against Rs 42.53 on the last working day.

A nominal amount of export and import booking was conducted in cash and spot basis while marginal amount of export booking was done in near forwards in merchant sections.

Cash-to-spot dollar opened higher at 5.00-6.00 paise premium and closed at 4.50-5.00 paise premium. The forward premiums in paise are: 48.00-53.00 for September, 88.00-92.00 for October, 121.00-126.00 for November, 158.00-163.00 for December, 194.00-199.00 for January, 228.00-232.00 for February and 269.00-272.00 for March in swap sections.

UNI