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| There will also be a tussle between foreign institutional investor (FII) inflows into the system, which will help the rupee to appreciate, and interbank squaring up of short positions, which will force the rupee down. |
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| The rupee closed on Friday at 45.3850/3950 against the dollar, down from a 38-month closing high of 45.26/27 on Thursday. It had dropped to 45.4425 intra-day on Friday. |
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| The rupee had opened on Monday at 45.30. There have been inflows of around more than $300 million into the market of foreign institutional inflows into the market. |
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| The forex reserves for the week ended October 3 showed a dip to $87.73 billion to $89.327 billion a fall of $1.59 billion. The fall is attributed to the outflow of Resurgent India Bond money out of the markets. |
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| According to dealers around $2.2 billion of RIB funds may have gone out of the system as the week ended October 3 had seen major FII inflows into the system. |
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| According to dealers, the rupee has got a technical support at the 45.25/26 level. However in case of heavy inflows both from exporters and FII, the rupee may appreciate. |
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| Given the levels of discount in forwards, inter-bank market will square its short positions and go long. This will force the rupee to go down while FII inflows into the system will have an opposite effect, |
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| Forward premiums |
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Premiums on the forward dollar dropped sharply on Friday as banks rushed to do buy-sell swaps fearing the RBI
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