Re Hardens, 6-Month Forward At 6.79%

FOREX REPORT

The rupee strengthened against the dollar in the face of lacklustre demand in the inter-bank forex market yesterday. It closed at 35.88-87. The six-month annualised forward premium softened with receiving pressure from the Reserve Bank of India (RBI), closing at 6.79 per cent.

The spot market saw moderate dollar demand from the corporate sector. This was more than matched with supplies as many banks sought to unload their long positions.

Neither the Reserve Bank of India nor the State Bank of India (SBI) were noticed actively trading in the market.

New York being closed, the cash-tom and cash-spot segments were inactive. The tom-spot quoted at level/1 paise.

 

The forward market was more active with the RBI buying spot and receiving for September. Although the extent of its trading was not much, thin volumes was sufficient to exert a downward pressure on the premiums.

The monthly premiums in paise were 2-4 for February, 20-23 for March, 43-46 for April, 63-66 for May, 83-86 for June, 106-109 for July, and 126-129 for August. The one year forwards were 243-263 paise.

On the cross-currency front, the market continued to remain bullish on the dollar. However, there are expectations of intervention from the G-7 nations. The rupee closed at 58.14 against the pound, 21.17 against the mark, and at 29.92 per 100 yen.