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Rupee's rally continues in quiet trading; up two paise vs $, Rs 42.53/54

The rupee continued its rally against the US dollar and appreciated further by two paise in a quiet interbank foreign exchange market today.

Opening steady at Rs 42.55/57, the rupee remained at that level till noon with moderate dollar demand and offering. In the afternoon, the Indian unit moved up with renewed dollar sales by banks and corporates and closed at Rs 42.53/54, two paise higher from the previous close of Rs 42.55/56. State Bank of India sold some amount of dollars.

The rupee, which had weakened sharply by about 15 paise last week due to month-end consideration and uncertain political situation after the defeat of ruling BJP in the assembly elections, has gained by four paise since Tuesday.

Forward premia came down a bit on better receiving and lower paying pressure. On an average, the monthly premia were lower by 3/4 paise. The one month annualised premium was lower at 4.84 (4.92), third month at 6.14 (6.22 per cent), sixth month at 7.45 (7.46) and 12-month at 8.41 (8.43) per cent.

The Reserve Bank of India has fixed the reference rate for US dollar two paise higher at Rs 42.55 from Rs 42.57 of the previous day.

Cash/spot ended at 1.50 -2.00 paise while cash/tomorrow between level rate and 0.25 paise. The month-wise premia in paise were : December 11-13, January 32-35, February 56-59, March 86-89, April 118-121, May 149-152, June 181-184, July 214-217, August 247-251, September 282-285, October 313-318 and November 346-351.

In the overseas market, the us dollar was nearly steady against pound sterling and deutsche mark while it weakened slightly against the yen. The rupee ended a bit lower against sterling at Rs 70.90, Rs 25.44 for DM and Rs 35.88 for yen.

In the domestic money market, the call money rates remained steady at 7.90-8.00 per cent with the market witnessing lower activities as the participants already squared up their position, ahead of the reporting Friday. Opening at 8.00-8.10, the rates ruled in a narrow range between 7.80 and 8.10 throughout the day.

UNI

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