Rupee In Tight Groove, Forward At 4.2%

FOREX REPORT

The rupee moved in a narrow range of 1 paise against the dollar in the inter-bank money market yesterday.

It strengthened to close at 35.74-75. The forward premiums on the dollar remained soft with the six month annualised closing at 4.2 per cent. The spot rupee opened at 35.75-76. It climbed marginally to 35.74 but was supported by the Reserve Bank of India. The central bank is reported to have made substantial purchases. However, the good dollar supplies limited the impact of RBIs purchases.

The apex banks reference rate on the dollar was lower at 35.75 as opposed to 35.77 for the previous days. The cash-tom and tom-spot were -.5/0 paise, and the cash-spot was -1/0 paise.

The forward market witnessed an unusual development as the one month dollar sold at a discount of -.25. Thus, exporters had to sell the one month dollar at a price of .25 paise less than the spot price. The Reserve Bank of India was seen intervening for the months of June to August.

Monthly premiums in paise are -.25 - .25 for April, 3-6 for May, 14-17 for June, 31-34 for July, 48-51 for August, 64-67 for September, 78-81 for October; one year premiums were 155-175 paise. Overseas the market continued to remain bullish on the dollar. The rupee also strengthened closing at 57.95 against the pound, 20.76 against the mark, and 28.3 per 100 yen.