Rupee Range-Bound, Forwards Slide Further

FOREX REPORT

The rupee was steady against the dollar in the inter-bank forex market yesterday. It closed at 35.85/855, almost unchanged from the previous days close of 35.845/855. The forward premiums declined in the face of increased receiving pressure. The six-month annualised rates closed at 7.25 per cent, 34 basis points lower than Tuesdays figure of 7.59 per cent.

The Indian currency opened at 35.85/86, but with lacklustre dollar demand, it firmed up during the course of the day. The RBI entered the market and made a some dollar purchases to support the dollar which has being depreciating over the past few days. The State Bank of India (SBI) was not seen trading actively. The cash tom was 0/.5 paise, the tom-spot was 0/.5 paise, and the cash-spot was 0/1 paise.Forward premiums across-the-board continued to ease as paying pressure fell short of receiving pressure. Dealers referred to the fall in premiums as a correction process. Unusually, high paying pressure over the last fortnight caused the premiums to rule high despite the low rates prevailing in the domestic money markets. This paying interest has now tapered off.

The monthly premiums in paise were quoted between 4-7 for January, 22-25 for February, 47-50 for March, 74-77 for April, 95-98 for May, 118-121 for June, and 140-143 for July. The one-year premium was at 260-290 paise.