Re Hardens By 8 Paise, Premiums Dip

FOREX REPORT

The rupee appreciated against the dollar by eight paise to close at 38.65-70 following lackluster trading in the foreign exchange market yesterday. Forward premiums softened significantly for the near-term on account of lack of paying interest in the market. However, they remained steady in the far-term. Premiums closed at 16.72 per cent for one-month, 18.76 per cent for three-month, 15.83 per cent for six-month, and 14.10 per cent for 12 month. Spot rupee opened at 38.73-78. However, trading activity remained dull. Dealers said with the RBIs intervention strategy being unclear, the inter-bank segment is not taking fresh positions aggressively. Besides, corporate demand is only nominal. Cash-tom closed at 1/1.5 paise, tom-spot at .25/.75 paise, and cash-spot at 1.5/2 paise.The forward market also saw quiet trade. The apex bank intervened in the market transacting sell-buy swaps for the near-term. However, its intervention was limited and although premiums did respond by firming up in the morning, after the central bank moved out of the market, they softened. Monthly premiums (in paise) closed at : 29-32 for Feb, 99-100 for March, 165-168 for April, 205-210 for May, 250-255 for June, 290-395 for July, 320-330 for Aug, 360-370 for Sept, 400-415 for Oct, 440-450 for Nov, 480-495 for Dec, and 525-535 for January.