Rupee Closes Steady, Forwards Soften

FOREX REPORT

The rupee opened weak against the dollar, but later closed steady at 35.88-89 on RBI intervention. Forward premiums softened due to absence of paying pressure with the six-month forward premium closing at 6.8 per cent.

The spot rupee opened weak at 35.92-93 as the market expected good buying by banks on account of the upcoming long week-end. Later, during the day it slipped to 35.94. However, there were good supplies in the market from financial institutions such as ICICI, IDBI, ICICI Bank and exporters.

This pushed the dollar downwards to Rs 35.83-84. The RBI intervened only later in the day mopping up an estimated $75 million.

The tom-spot and cash-spot were relatively strong at 4/7 and 1/3 paise respectively, on account of the upcoming long week-end.

In contrast with the spot market, the forward market was relatively inactive. Expectations of lower domestic interest rates in the coming fiscal have added to the prevailing soft sentiment. Premiums continued to dip across the board.

Monthly premiums in paise were 17-20 for April, 38-41 for May, 59-62 for June, 80-83 for July, 100-103 for August, 119-122 for September, and 138-141 for October. One-year premiums were 232-247 paise. The rupee fairly steady against major world currencies. It closed at 58.55 against the pound, 21.47 against the mark and 29.2 per 100 yen.