Re ends higher at 42.52/$

MARKETS REPORT

Forex market

Outlook:
The trend is for appreciation and is likely to open at around 42.50 level on Monday.

Sentiment: Bullish

The spot rupee traded at 42.77/78 in opening transactions and later appreciated sharply to close at 42.50/52.

The annualised premium for six-month and one-year closed at 6.08 per cent and 4.58 per cent, respectively.

Money market

Sentiment: Cautious

Liquidity remained comfortable on Thursday.

Ample liquidity conditions look to be temporary as the bond auction (Rs 10,000 crore) and the Cash reserve Ratio (CRR) rise together are likely to suck out Rs 17,000 crore from the system this week. The market had factored in the outflow in first reporting Friday in the new financial year (2007-08).

Government spending and limited amount of foreign exchange buying by RBI has raised the level of resources in the system.