Re Gains Further, Closes At 38.73

The rupee yesterday closed strong at 38.73-78 against the dollar, compared with Tuesdays close of 39.00-10 while forward premia moved up 30-70 paise across all maturities.

In the call money market, rates opened at around 70-80 per cent and ruled between 40 and 50 per cent before closing at 35-45 per cent.

The one-month forward closed around 41.70 per cent, the 3-month at 29.13 per cent and July dollars at over 22 per cent.

Premia rocketed upwards by 75 paise on account of covering interest by corporates, forex dealers said. Banks were also reported to be funding their rupee positions through sell-buy swaps in the forex markets: selling dollars now to generate rupees, with a simultaneous contract to buy dollars on a future date. This has added to the forward dollar demand, leading to high premia, dealers said.

Securities Trading Corpora-tion of India (STCI) was back in the call market yesterday. STCI sources said they had done business of Rs 750 crore, with the weighted average lending rate at 50.88 per cent.

Money market dealers do not expect the call rate to ease for the rest of the fortnight. The high call rates would drive the premium upwards, money market dealers said.

Treasury bills maturing in January-April were dealt at yields of 17 per cent-20 per cent. In the securities segment, the 13.50 per cent 1998 was dealt at Rs 98.60 and the 12.14 per cent 2000 was dealt at Rs 98.70-Rs 98.90. In the secondary market, two-month commercial paper was quoted at levels as high as 18 per cent.