Re Touches 36.28 On Banks Dollar Sales

The rupee yesterday crossed the psychological level of 36.30 to quote at Rs 36.28 a dollar before weakening to close at 36.32, compared with yesterdays close of 36.34-35.

Forward premia continued to remain soft, with the six-month forward closing at 5.48 per cent and the one-year closing at 6.03 per cent.

The market was inactive for most of the day with a flurry of activity the evening. The market is expected to test the Rs 36.30 mark again today.

The Reserve Bank of India stayed away from the market yesterday. However, dealers said it may step in today if the rupee continues to appreciate.

The other major player, the State Bank of India (SBI) was observed quoting in the market but was not reported to have made any purchases.

The spot rupee opened at 36.33-35 and stayed at that level for most of the day. However, banks with long positions unloaded some of their dollars in the evening, causing quotes to move up to 36.28 a dollar.

Cash-tom closed at .25/.5 paise, tom-spot closed at .25/.5 paise, and cash-spot closed at .5/.25 paise. Forward premia slipped three-five paise across-the-board during the day, due to good inflow of forward dollars and the low call rates prevailing in the money market.

The rupee appears to have attained some stability at last, following confidence in the market that the RBI will intervene to curb any volatility.