Rupee Closes Stronger Against Dollar

FOREX REPORT

The rupee closed stronger against the dollar on account of good supply of the American unit in the inter-bank forex market yesterday. It closed at 35.845-855.

The forward premiums strengthened on aggressive intervention from the Reserve Bank of India with the six-month annualised closed at 6.75 per cent.

The spot market was inactive. The rupee opened at 35.855-865. Supplies remained good, while demand was barely nominal. The RBI was present albeit not actively, picking up greenback from banks at 35.86. In the course of the day, the rupee strengthened to the closing levels.The cash-tom and cash-spot were -.5/.25 paise and the tom-spot was 0/0 paise.

The forwards segment, in contrast, was volatile. The premiums, which have been on a downslide since the budget, crashed to 6.1 per cent at 1:00 pm yesterday. The market expected the premiums to slip to below 6.0 per cent. However, the RBI intervened aggressively paying for May. Market estimates peg the RBIs forward purchases at approximately $100 million.Monthly premiums in paise were 4-6 for March, 24-26 for April, 41-43 for May, 60-63 for June, 83-86 for July, 106-109 for August and 128-131 for September.

Overseas, the dollar, while remaining fairly steady, lost some ground against major world currencies. The rupee closed at 57.54 against the pound, 21.01 against the mark and 29.46 per 100 yen.