Rupee gains 13 paise at 42.99/43.00 against a dollar

New Delhi, July 10, 2008
Ashok Malhotra

As crude prices continued to fall, the Indian rupee for the first time in two weeks breached the crucial 43-mark on Thursday in intra-day and closed at 42.99/43.00, a gain of 12 paise, against the greenback on heavy dollar sales by corporates.

In active trade at the Interbank Foreign Exchange (forex) market, the domestic currency touched the day's high of 42.98 per dollar.

In high volatility, the Indian unit fluctuated between 43.25 and 42.98 due to heavy dollar sales by some corporates and after resuming weak at 43.16/18 per dollar from its overnight close of 43.12/13.

A dealer with public sector bank said the domestic unit in tandem with the activity in equity markets rallied smartly as some leading corporates sold dollars in the latter part of the day.

The Reserve Bank of India, however, fixed the reference rate for the US dollar at Rs 43.16 and for the single European currency at Rs 67.95.

Forex dealers said the marked fall in global crude oil prices, which ruled at around USD 136 a barrel in Asian trade on Thursday, also buoyed the rupee sentiment.

They said the rupee is expected to move in line with the stock markets and any surge in shares will help the rupee to appreciate further against dollar.

Indian benchmark Sensex was down 38 points but bounced from the day's lows, raising hopes of capital inflows into the equity markets.

The rupee premiums on forward dollar ended sharply higher on fresh paying pressure from banks and corporates.

The benchmark six-month forward dollar premium payable in December ended at 95-1/2 - 97-1/2 paise, up from 85-1/2 - 87-1/2 paise on Wednesday and the far-forward maturing in June also closed higher at 169 - 171 paise from 152-1/2 - 154-1/2 paise previously.

In cross currency trades, the rupee firmed up further against the British Sterling, the Euro and the Japanese yen.

The domestic unit surged against the pound Sterling to end the day at Rs 84.87/89 per pound from its previous close of Rs 85.03/05 per pound and also improved against the Single European Currency to Rs 67.49/51 per euro from its last close of Rs 67.70/72 per euro.

The Indian unit strengthened against the Japanese Yen to Rs 40.07/09 per 100 yen from its overnight close of Rs 40.13/15 per 100 yen.