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Rupee plunges by 7 paise

The Indian currency depreciated by about 6 to 7 paise on Thursday compared to Wednesday's closing levels of Rs 36.375/385 against the greenback due to good merchant covering. Dollar purchases by foreign and local banks, mainly the State Bank of India, in an active trading at the interbank foreign exchange market further pushed the rupee down.

The rupee opened on a weak note at Rs 36.38-41 per dollar and witnessed a fall following a moderate demand from corporates, which pushed the rupee to a low of Rs 36.46. The State Bank of India's active dollar bidding also resulted in the rupee's depreciation, a forex dealer said.

The rupee finally settled down lower at Rs 36.45-46 per dollar for the day.

According to the forex dealers, the Reserve Bank of India did not enter the forex market but was making enquires and keeping a constant watch on the fall of the rupee, perhaps to ensure that it did not cross a certain mark.

The forward premiums also shot up by about 15 paise for long terms compared to Wednesday's levels with the eleven-month premium quoted at Rs 2.34-35 paise levels. While the cash to spot dollar ended at 2.25 to 3 paise premium due to higher call rates, dealer added.

The monthly premiums were quoted at November 13-14 paise, followed by December 33-34, January 55-57, February 76-78, March 100-102, April 121-123 and May 143-146 paise premium respectively.

On the other hand, the trading in the overseas market witnessed quiet trading with the dollar reported to be on a firm trend against various other European currencies.

Meanwhile, the Reserve Bank of India fixed the reference rate at Rs 36.42 per dollar compared to Wednesday's fix of Rs 36.36.

UNI