Re Appreciates, Forwards Remain Soft

FOREX REPORT

The rupee appreciated against the dollar in the face of lacklustre demand in the inter-bank forex market yesterday. It closed at 35.78. Forward premiums remained soft as receiving interest outstripped paying interest. The six-month annualised premium closed at 4.46 per cent and the one-year premium at 4.4 per cent.

The spot rupee opened at 35.78-79. Dollar supplies continued to remain slightly higher than demand. Major buyers like the Reserve Bank of India (RBI) and the State Bank of India (SBI) did not enter the market. Hence, the rupee ended the day on a stronger note.

The cash-tom was -.25/.5 paise, the tom-spot, 0/.5 paise, and the cash-spot,-.25/.75 paise. In the forward segment, limited paying interest and active receiving interest kept premiums soft. Importers, confident that the dollar will remain weak for some time, are not taking the cover.

Monthly premiums in paise were 4-6 for June, 13-16 for July, 25-28 for August, 41-44 for September, 57-60 for October, 72-75 for November, 87-90 for December, 103-108 for January, 117-122 for February, 133-138 for March, 149-154 for April and 163-168 for May.

Overseas, hectic dollar-selling saw the greenback depreciate against major currencies. However, this did not impact the rupee's equation with these currencies as it strengthened against the dollar. The rupee closed at 58.54 against the pound, 20.89 against the mark, and 31.81 per 100 yen.