Rupee Recovers To Close At 42.85

FOREX REPORT

The rupee recovered from an all-time low of 43.70 to close at 42.85-95 against 43.47-53 on Wednesday following the announcement of the Reserve Bank's rupee support package.

The forward rupee weakened on the liquidity tightening measures and central bank intervention through sell-buy swaps for near maturities.

Premiums closed at : 1-month - 19.04 percent (9.83 on Wednesday); 3-month - 14.3 percent (9.23); 6-month - 12.93 percent (9.08); 9-month - 11.84 percent (9.50); 12-month - 11.55 percent (9.49).

Spot rupee opened at 43.53-57 and steadily weakened on corporate buying and a statement from commerce minister Ramakrishna Hegde that weakening balance of payments may see the rupee depreciate further. The rupee slipped to 43.70 by noon, but recovered following the RBI rescue package. Trade was volatile following the package but the rupee was held above the 43 mark.

Cash-tom closed at .5/.75 paise, tom-spot at 2/3 paise, and cash-spot at 2.5/3.75 paise.

The forward dollar premiums shot up on the central bank' measures and barring of re-booking of cancelled forward contracts.

Premiums (in paise) closed at: Aug - 20-25; Sep - 75-85; Oct - 115-130; Nov - 155-170; Dec - 190-205; Jan - 225-240; Feb - 270-285; Mar - 305-320; Apr - 345-365; May - 380-395; Jun - 415-440; Jul - 455-475.

In the crosses, the rupee closed at 70.01 against the British pound, 23.93 against the German mark, and 30.31 per 100 Japanese yen.