Rupee Dips A Shade, Forwards Rally Continues

FOREX REPORT

The rupee depreciated against the dollar in the inter-bank forex market yesterday, closing at 35.86-87, marginally weaker than the previous days close of 35.845-855. The forward premiums continued to rise, while the six-month annualised premium ended the day at 7.75 per cent.

The rupee opened at 35.88-90. Then, there was increased dollar supply, possibly from external commercial borrowings. However, the lack of demand for the American currency during the first half of the day caused the rupee to strengthen to 35.845-855.

The State Bank of India (SBI) entered the market a little after mid-day to purchase a nominal amount of greenbacks. There was also some demand from importers. The dollar thus notched up a few basis points against the rupee which touched a high of 35.87-89, before dipping to the close levels.

The RBI was not present in the market yesterday. The cash-tom was -.25/+.25 paise, the tom-spot was +.75/+1.25 paise, and the cash-spot was +.75/+1.25 paise. The premiums continued to strengthen across the board from one to three paise. Dealers reported lot of profit taking by banks and corporates. The banks also rolled-over someFCNR(B) funds.

The monthly premiums were 9-11 paise for January, 27-30 for February, 57-60 for March, 83-86 for April, 104-107 for May, 128-131 for June, and 150-153 for July.