Rupee Up A Touch, Forward At 4.48%

FOREX REPORT

The rupee notched up a marginal gain against the dollar on account of lacklustre demand in the inter-bank forex market yesterday. It closed at 35.815-825. Forward premiums remained soft as forward sales exceeded purchases. The six-month forward premium was 4.48 per cent and the one-year premium 4.38 per cent.

The spot rupee opened at 35.82-83. Banks held long dollar positions expecting the Reserve Bank of India (RBI) to make purchases of the greenback. When the apex bank did not enter the market, the banks started selling and the rupee climbed to close levels. The cash-tom was -.5/0 paise, the tom-spot, -.25/.25 paise, and the cash-spot, -.75/.75 paise.

The forward market was characterised by excess receiving interest as compared to paying interest. The main source of paying interest is corporates who are buying the forward cover for their forex loans. Monthly premiums in paise were 0-2 for June, 9-12 for July, 20-23 for August, 35-38 for September, 52-55 for October, 66-69 for November, 81-89 for December, 96-99 for January, 112-115 for February, 125-130 for March, 143-146 for April, and 157-168 for May. Overseas, the data on the US economy did not have much of an impact on the exchange rate. In the domestic market , the rupee remained fairly steady against other currencies.

The rupee closed at 58.65 against the pound, 20.67 against the mark, and 31.67 per 100 yen.