Gdr, Fcnr Inflows Hold Rupee At 35.62

Sustained dollar inflows kept the rupee anchored at 35.62 against the dollar in the domestic forex market yesterday.

There was an increase in inflows from GDR issues of companies. An additional source was the infusion of FCNR (B) funds. These funds, estimated at $3 billion and earlier parked abroad, were brought in by banks. Even if 60 per cent of those funds were transferred, it would be substantial to meet the requirements of the market, dealers said. Since these inflows have been staggered over the past few weeks, the rupee movement has been less pronounced. The rupee opened the day between 35.62 and 35.63 and hovered around these figure during the entire course of trading. The closing quotes were also in the same range.

 

Forward premiums were around Monday's quotes with the annualised rates on the six-month forward dollar at 8.5 per cent. Bankers said that the inflow of FCNR funds had taken place because the cost of bringing these funds into the country was less than the PLR rates.

A few bankers, however, said the RBI had been verbally persuading banks to bring in the funds. Monthly premia rates rates for October were quoting at 9/12 paise, 27/31 paise for November, 48/52 paise for December, 79/83 paise for January, 103/108 paise for February, 133/138 paise for March and 164/169 paise for April.