Forwards Stay High, Rupee Slips A Shade

According to dealers, the spot dollar rates opened a shade higher between Rs 35.64 and Rs 34.69, and moved in this range for the better part of the day. However, a few bankers said the rates rose to Rs 35.67-Rs 35.69 later in the day on account of moderate dollar demand. They finally closed in the range of Rs 34.65 to Rs 35.67, disclosing a marginal decline in the rupee.

Dealers expect the rates to rule in this range until the end of the week as they do not foresee a marked increase in demand for spot dollars. In the forward section, premium rates were significantly higher than they were on Monday and at the end of last week. Monthly premiums, too, were up from those quoting at the beginning of this week.

The increase in the forwards was ascribed to the large amount of FCNR roll-overs by banks, which pushed up the demand for forward dollars. Monthly premium rates were, therefore, on the higher side for all months except for August-end, for which the rates went down as the month-end was approaching. The rates were quoting at 5/9 paise for August, 34/42 paise for September, 70/83 paise for October, 102/112 paise for November, 134/149 paise for December, 175/192 paise for January and 207/222 paise for February. The annualised rates for the six-month forward dollar was, therefore, between 11 and 12 per cent.

In the international markets, the dollar was marginally weaker against the mark, fluctuating between 1.4830 and 1.4880. It, however, remained fairly steady against the yen, after hardening against the latter on Tuesday. The dollar-yen rates were quoting in a range of 108.25 to 108.35. The dollar-Swiss franc rates were quoted between 1.2000 and 1.2050.