Re Touches New Low, Forwards Up

FOREX REPORT

The rupee touched a new low of 39.25-30 on sustained corporate buying fuelled by political uncertainty through the day. Forward premiums sharpened following the RBI's package of measures aimed at tightening liquidity in the market.

The six-month premium closed at 8.01 per cent, and the one year at 7.6 per cent.

Spot rupee opened at 38.60-70. State Bank of India (SBI) was buying dollars in the market in two rounds.

Other banks also actively bid for the dollar.

The rupee moved downward by 10 paise in phases. It crossed the 39 mark by late afternoon, and some more State bank of India buying at those levels saw it close at 39.25-30.

Forward premiums moved up sharply following the Reserve Bank of Indias policy prescription aimed at curbing speculative activity in the forex market by tightening liquidity in the money market.

Premiums closed 9 paise higher for February, 14 paise higher for May, and 19 paise higher for November 1998.

Monthly premiums (in paise) for the year ahead closed at December : 23-25, January : 49-51, February : 69-74, March : 93-98, April : 114-119, May : 136-141, June : 159-164,

July : 181-186, August : 203-308, Sepember : 224-229, October : 245-250, November : 265-270, and December : 290-295.

In the crosses, the rupee closed at 65.50 against the British pound, 22.08 against the German mark, and 30.47 per 100 Japanese yen.