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Rupee plunges to all-time closing low on month-end $-demand

• Rs 43.62 vs $
• Rs 42.80 vs euro
• Rs 70.82 vs pound
• Rs 40.83 vs yen (100)

The Indian rupee closed two paise lower agaisnt the greenback at Rs 43.6250/6325 on month-end dollar demand, coupled with lower inflows at the interbank foreign exchange market today.

The rupee opened a bit lower at Rs 43.61/62, further eased to Rs 43.6350/6400 level around noon due to short covering by some corporates.

However, State Bank of India's reported dollar sales later helped the Indian currency to recover some of its lost ground and close at Rs 43.6250/6325, still two paise lower from the previous day's close of Rs 43.6050/6150.

Dealers attributed the rupee's marginal decline to the month-end dollar covering by some corporates on the last day of the first month, coupled with relatively lower foreign portfolio inflows.

Forward premia, tracking the spot market, firmed up marginally on some paying pressure. The sixth month annualised premia closed slightly higher at 3.20 per cent as compared to 3.13 per cent of the previous day.

Cash/spot and cash/tomorrow finished at 0.50-0.75 paise and 0.25 -0.50 paise respectively. The month-wise premia in paise were: February 11-12, March 23-24, April 35-36, May 46-47, June 57-58 and July 69-70.

Meanwhile, the Reserve Bank of India fixed the reference rate for US dolalr at Rs 43.64 as against Rs 43.61 of the previous day.

In the cross currency, the rupee ended sharply higher against the Japanese yen at Rs 40.83 as compared to Rs 41.62 of the previous day. The Indian unit also edged up against sterling and euro at Rs 70.82 (70.89) and Rs 42.80 (42.98) respectively.

At the domestic money market, call rates ruled in a narrow range of 8.00 -8.20 per cent and closed at 8.00-8.10 per cent, a bit lower from 8.10-8.20 per cent of the previous day.

UNI

The rupee could touch 43.80 to US $ by March 2000

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