Re Up A Touch, Forwards Follow Suit

FOREX REPORT

The spot rupee appreciated yesterday against the dollar to close at 42.10-14 against its Tuesday close of 42.28-30 as importers stayed away from covering because premiums were at unattractively high levels.

Given that the yen has strengthened against the dollar, sentiments in the Indian forex market are also expected to pick up and the possibility of the rupee appreciating above 42 today is not ruled out.

Forward premiums increased with one month closing at (per cent) 14.70 (13.43 on Tuesday), three-month at 13.12 (12.83), 6-month at 12.16 (11.95) and one-year at 11.31 (11.20). Exporters were selling forward as they were advised by banks to sell a major portion of their receivables.

Given the lack of demand and good selling by exporters, the rupee appreciated. The spot rupee opened at 42.27-30 and traded at an intra-day low of 42.33-35 before closing at a high of 42.03-05. The RBI's reference rate was 42.25 as against 42.37 on Tuesday. The State Bank of India was not active in the market.

Yesterday cash tom was 0.75-1.25 paise, cash spot was 1.50-2.50 paise and tom spot was 0.75-1.25 paise.

Monthly premiums (in paise) closed at : 17-20 for Jun, 70-75 for Jul, 111-116 for Aug, 150-155 for Sep, 190-195 for Oct, 229-234 for Nov, 269-274 for Dec, 309-314 for Jan, 348-353 for Feb, 389-394 for Mar, 422-427 for Apr and 455-460 for May 1999.