Rupee Remains Range-Bound Against Dollar

Domestic forex markets did not report much activity yesterday on the spot and the forward segments.

According to market reports there was not much activity because the market was waiting for the credit policy, which according to sources, will be on October 17. The lack of activity was also because the market is expecting some amount of hardening of the rupee after the announcement of the credit policy.

Spot rates of the dollar opened at around Rs 35.62-35.63 and were hovering around these levels through the day. They closed at this figure. The spot rupee is expected to harden to 35.50 after there is an inflow of funds by way of GDR issues. The most awaited is the SBI GDR issue, which dealers feel, will boost the supply of dollars thereby resulting in a hardening of the rupee. Bankers were also of the view that the RBI would not allow the rupee to harden beyond 35.50 level.

Forward premia on the dollar were slightly firmer as the monthly premia rates over the long-term inched up.

This, dealers said, was due to the fact that there were some buyers in the market. Some private banks were reported to have paid premia on forward dollars which resulted in the premia levels moving up. The short term premia levels however were around the same levels as they were on Thursday.