Rupee Falls Marginally

The market opened with the rupee at 45.73/75 level. It moved lower to a level of 45.77/80 in the early half of the day.

Rumours in the morning that the Reserve Bank of India (RBI) was looking at a 48.00 level led to a further fall in the value of the rupee and buying increased.

The intra day high was recorded at the rupee valuing 45.81 against the dollar. The spot market closed with the rupee at 45.78 rendering the rupee 5 paise weaker than the previous day.

The demand was relatively small and thin volumes were traded. There was a steady supply from foreign institutional investors (FIIs) and public sector banks.

Dealers said that these banks were selling for the government institutions and possibly for the oil sector too.

The six month annualised forward premiums closed higher at 5.3 per cent as compared to the opening of 5 per cent. Buying in the forward market firmed up today. The far forwards tracked the movement of the spot rupee.

A dealer with a private sector bank said that most of the trading yesterday comprised interbank transactions. The market went short due to the evening roll over and the rupee might fall further tomorrow, he added.

The near term supply for the rupee is predicted to be relatively stable. Most of the supply is expected to come from exporters and FIIs and oil is still going to claim a major chunk of the demand said a foreign exchange dealer.

Another dealer said that the market witnessed stability after a very long time and the rupee is expected to open at 45.83/84 levels today. Most of the demand yesterday was inter bank and FII's constituted a major chunk of the supply side.