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Rupee goes on a joyride over peace prospect in Kargil; up 16 paise to Rs 43.24 vs $

The Indian rupee staged a smart recovery and appreciated by 16 paise against the greenback on heavy dollar off-loading by commercial banks and dealers.

The spurt was attributed to prospects of an early end to the two-month-old Indo-Pakistan border conflict, following an assurance given by Pakistan Prime Minister Nawaz Sharief to US President Bill Clinton on withdrawal of forces from Indian soil.

The Indian currency which opened lower, was on sustained demand from banks and corporates due to encouraging reports on settlement of border crisis which helped boosting the sentiment, at the interbank foreign exchange market today.

Opening higher at Rs 43.29/39, which itself was the day's low, the rupee continued its rally as the market virtually turned to a dollar seller's market. Corporates and banks off-loaded their dollar position expecting further rise of the rupee value in the wake of the encouraging Indo-Pak development, while importers preferred to stay away, awaiting further appreciation of the Indian currency, dealers said.

The Indian unit closed sharply higher at Rs 43.23/24 as compared to Rs 43.39/40 of the previous day's close.

Tracking the spot market, the forward premia eased on receivings. Monthly premia on an average fell by 4-5 paise.

The sixth-month and the yearly annualised premia closed lower at 4.87 per cent and 5.52 per cent respectively as against 5.13 per cent and 5.88 per cent of the previous day.

UNI

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