Re Closes Steady Against $, Forwards Slip

FOREX REPORT

The rupee remained fairly steady against the dollar in the inter-bank forex market yesterday despite intervention from the RBI. It closed at 35.88-89.

The forward segment was choppy as premiums fell after the announcement of a cut in domestic interest rate. RBI intervention supported the forward dollar and the six-month annualised closed at 7 per cent.

Spot rupee opened at 35.89-91. At mid-day, the RBI entered the market buying at 35.905 levels. The State Bank of India (SBI) was not noticed in the market yesterday, and corporate demand remained nominal. Dollar supply continued to remain good with banks being net sellers.

 

The cash-spot was 0/.25, the tom-spot was 1/1.5, and the cash-spot was 1/1.5 paise. The forward segment was relatively more volatile than the spot.

After the announcement of the cut in domestic interest rates, the forward premiums slipped. However, the RBI quickly intervened buying outright for June and August.

The monthly premiums in paise were 3-5 for March, 24-26 for April, 45-47 for May, 67-69 for June, 87-89 for July, 108-110 for August, and 129-131 for September. One year premiums were 225-235 paise.

Rupee weakened against other world currencies, albeit marginally, closing at 57.27 against pound, at 21.38 against the mark, and 29.30 per 100 yen.