Re Down 4 Paise, Forward Spurts To 5.3%

FOREX REPORT

The rupee slipped by 4 paise against the dollar, closing at 35.75-76, in the face of strong intervention by the Reserve Bank of India (RBI) in the inter-bank forex market yesterday. Forward premiums also rose sharply on account of high inter-bank trading activity with the six month annualised closing at 5.3 per cent.

The spot rupee opened at 35.75-76. Supplies remained good and some month-end demand was witnessed. In the morning, for a period of about 3 hours, the RBI intervened heavily, mopping up about $ 150 million. The RBI's intervention combined with the resultant short-selling by banks saw the rupee touch an intra-day low of 35.80 bid.After 1:00 pm the RBI pulled out of the market and the rupee inched up one paise to the close levels.

 

The forward segment was also active and the six month annualised climbed by over 70 basis points following good inter-bank paying activity. Market sources attribute the rise to rising call rates. Monthly premiums in paise were 7-10 for May, 19-22 for June, 36-39 for July, 55-58 for August, 73-76 for September, 90-93 for October, and 104-107 for November. One month premiums were 178-183 paise.

Overseas the market remained quiet as both Tokyo and London remained closed. The rupee remained fairly strong against other major currencies closing at 57.98 against the pound, 20.70 against the mark, and 28.29 per 100 yen.