Rupee Declines To Close At 39.23/25

FOREX REPORT

The rupee slipped to 39.33-34 against the dollar before recovering to close at 39.23-25.

There was concern in the market when the Reserve Bank of India (RBI) did not intervene in the morning. At that time there were deals up to 39.33.

The State Bank of India (SBI) then started selling dollars in the spot and forward market and the rupee strengthened. The Indian currency was range-bound thereafter. Many dealers believe that SBI sold on behalf of the apex bank.

There was corporate demand on account of month-end payment obligations. Forward premiums opened higher with banks anticipating corporate demand to materialise. However, corporates did not come to the extent that was envisaged.

One-month premiums closed at 13.15 per cent (as against 13.69 per cent on Monday), three-month at 15.80 per cent (16.82 per cent), six-month at 14.83 per cent (13.51 per cent), and one-year at 13.50 per cent (14.08 per cent).

Yesterday cash tom was 0.75-1 paise, cash spot 0.75-1 paise and tom spot 0.5-0.75 paise.

Monthly premiums (in paise) closed at : 42-43 for March, 106-107 for April, 152-155 for May, 153-155 for June, 203-204 for July, 252-253 for August, 289-291 for September, 327-328 for October, 407-410 for November, 446-449 for December, 487-490 for January 1999 and 515-530 for February 1999.

In the crosses, rupee closed at 64.57 against the pound, 21.80 against the mark, and 30.71 per 100 yen.