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SBI counters hectic buying, short-covering by banks; rupee down two paise, Rs 42.57/58 vs $

Opening at Rs 42.53/57 to a dollar, the rupee came under buying pressure from the banking sector led by SBI, which was mopping up greenback on behalf of its corporate clients.

The rupee touched a low of Rs 42.63/64 during the day. It hovered at this level sometime before the close of trading. At this point, SBI sold considerable quantity of dollars in the market. The rupee ended at Rs 42.57/58, showing a net loss of two paise from the previous close of Rs 42.55/56.

The forwards, which came under pressure in the morning, calmed down in the later hours. The monthly premia (in paise) were 19-22 for December, 45-48 for January, 70-73 for February, 101-104 for March, 133-137 for April, 164-168 for May and 198-201 for June.

The six-month annualised premia ended at 8.15 per cent. Cash/spot ended at 0.75-1.00 paise, while cash/tomorrow and tomorrow/spot at 0.00-0.25 paise levels.

In the Tokyo market, the US dollar extended Friday's overseas gains today, hitting a new two-week high of 123.78 yen. However, in a liquidity-drained market this holiday session, its gains were moderate. Dollar trade against the mark consolidated in a 33-point band, while the mark/yen pair managed to stay above 72 in spite of talk of the European central bank possibly opting for a monetary easing in the first quarter of 1999.

Back home, the Reserve Bank of India fixed the reference rate at Rs 42.63 per US dollar from the previous fix of Rs 42.52. Pound sterling ended at Rs 70.32, Japanese yen at Rs 34.49 and deutshce mark at Rs 24.96 against the rupee.

UNI

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