Forex Merchant Segment Turnover Up To $7.39 Bn

The turnover in the forex markets for the fortnight-ended May 16 to 30 was $7.395 billion in the merchant segment as opposed to $6.976 billion in the previous fortnight. It was $32.555 billion in the inter-bank segment compared to $37.721 billion in the previous fortnight.

In the rupee-to-foreign currency (FCY) spot trade, merchant purchases by banks, i.e banks' purchases from their clients was at $2.245 billion, only marginally higher than sales to the merchant segment at $2.168 billion. This indicates that demand and supply from the corporate sector is more or less equal. Activity in the forward market in the merchant segment has gone up. Corporate forward dollar selling was $847 compared to $796 million the previous fortnight. Corporate forward dollar buying was $572 million compared to $411 million the previous fortnight. However, bankers indicate most of the demand has come from corporates with forex loan liabilities rather than import liabilities.

 

In the FCY/FCY spot trade, merchant purchases were $130 million and sales, $142 million. In the forward segment, purchases by banks were at $362 million and sales by banks, $339 million.

In the inter-bank FCY/rupee trade, spot dollar purchases by banks stood at $3.413 billion, higher than sales at $ 3.701 billion. This is despite sales by banks to the RBI. This indicates a shift in trend as for most of this year, the inter-bank purchases have been less than sales. In the forward segment also, the purchases by banks were $614 million compared to sales of $690 million.

Swap purchases were at $4.490 billion and sales at $4.303 billion, indicating lack of volatility in the exchange rate. In the inter-bank FCY/FCY spot trade, volumes were substantially lower than in the previous fortnight. Spot purchases were $5.768 billion against $7.405 billion the previous fortnight.

Sales were $5.764 billion compared to $ 7.428 billion. Forward purchases were at $432 million compared to sales of $420 million.

The data is compiled by the RBI on a daily basis from 90 to 95 banks. While all the banks in the system are not included, the data is indicative of the trading volumes in the system.