Re Hardens Further, Forwards Remain Easy

The rupee notched up fresh against the dollar in the domestic forex market yesterday.

Resuming the day a touch higher between 35.61 and 35.62, the Indian currency firmed up to 35.58-35.59 during the course of trading. The rates closed in the region of 35.62 to 35.63.

Dealers ascribed the hardening of the rupee to the near-absence of corporate demand. The State Bank of India, a key player in the market, was reported to be making moderate dollar purchases. The amount, however, was not large enough to cause a sharp movement in rates. Demand for greenbacks was also said to be forthcoming from local banks but this was matched by adequate supplies.

Dealers said the impact of the new credit policy package on the rupee-dollar parity had already been felt, but added that it had phased out on Tuesday.

In the forward section, the premiums were also on the lower side with the annualised rates quoting at 7.5 per cent. They had declined to 7 per cent on Tuesday.

Monthly premiums were down from Tuesdays figures. The rates were quoting at 2-3 paise for October, 12-14 paise for November, 30-33 paise for December 57-59 for January, 78-80 for February, 105-107 paise for March and 126-129 for April.