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Rupee plunges sharply, touches Rs 36.90

The rupee fell sharply against the American greenback thanks to heavy demand from corporates and nervous client covering by banks in choppy and volatile trading at the interbank foreign exchange market in Bombay today. The Indian unit was down by 14 paise in a single trading session.

Opening at Rs 35.74775, the rupee started drifting lower in the early hours of trading. According to dealers, the Reserve Bank of India interviewed in both spot and forward sections pumping in about US dollar 200 million in the system. Bankers informed that the RBI intervention in the forwards was more prominent for the months of January, February and March.

Nevertheless, the rupee crossed the psychological barrier of Rs 36.80 to the intraday low of Rs 36.89-90.

"Had it not been for the RBI's selling, the rupee would have crossed Rs 36.90s levels today." a senior forex dealer with a nationalised bank said. The rupee finally ended at Rs 36.8750-89.

According to dealers, there was heavy booking by importers in the forward section and outward remittances towards payment obligations.

Cash spot closed at 0.00-0.125 paise premium. Tom spot and cash tom ended at level.

The monthly forwards (in paise) were 5-7 for November, 28-30 for December, 55-57 for January, 76-77 for February, 101-102 for March, 120-122 for April and 140-142 for May. Swap difference for one-year was 245-249.

The six months annualised premia closed at 7.15 per cent.

The pound closed at Rs 62.29, the mark at Rs 21.21 and yen at Rs 29.45.

Dealers said that trading in overseas markets was quiet, with not movements witnessed in major currencies.

Elsewhere, the RBI fixed the reference rate at Rs 36.81 per US dollar as against the previous fix of Rs 36.73.

UNI