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Rupee rises by 30 paise

The rupee opened at 39.05/15 per US unit, firmed up immediately to 38.70-72 level due to cancellation of bookings by importers. The State Bank of India was seen issuing two-way quotes in the market, but did not participate actively, dealers said. The Indian unit saw some activity in the late afternoon trade and finally closed at Rs 38.75-78, showing a gain of about 30 paise over the previous close of Rs 39.10.

Most market participants are now sure that the rupee will not cross Rs 40 level in the next couple of months, because of that the market sentiments cooled down automatically, leading forex dealer said.

The monthly forward premia, however, was continuously quoted at higher levels due to higher call rates, dealers said.

Commenting on the rupee recovery and the market trend, Aditya Gokhale, analyst at Lloyds Finance Corporation, said, ''Though the spot rates came down heavily, the six-month premia is ridiculously high.'' Gokhale also attributed this increase in the forward premia to the tight call money market. Call rates still are in the range of 40-50 per cent, he said.

Cash spot business opened at 14-18 paise premium and closed at 13-15 paise premium.

Monthwise forward premia in percentage were 41.70 for first month, 35.52 for second, 29.13 for third, 25.77 for forth, 25.77 for fifth and 18.18 for sixth.

The one-year forward premia closed at 16.50 per cent.

In the cross-currency section, the rupee was traded between Rs 63.76 and 62.76 against pound sterling, Rs 21.20 and 21.14 against D mark and Rs 20.36 and Rs 30.32 (per 100) against the yen.

The Reserve Bank of India fixed reference rate at Rs 38.96 as against Rs 38.74 per US dollar.

UNI