Re Hardens To 35.85, Premiums Slide Further

FOREX REPORT

The rupee recovered the ground lost to the dollar during the last week-and-a-half in the inter-bank forex market yesterday. It closed at 35.84/85. The forward premiums eased further with the six-month annualised rates closing at 6.81 per cent.

The spot market was characterised by good supply and lacklustre demand. The rupee opened at 35.87/89 but hardened to 35.84/85 during the course of trading.

A dealer with a foreign bank said foreign institutional investors, encouraged by the strong upward movements in the BSE Sensex, have allocated dollars to the stock market. These funds have flowed into the forex market.

 

The cash-tom and tom-spot were quoting at 0.25/0.75 paise, while the cash-spot was at 0.5/1.5 paise.

The forward premiums eased considerably. Dealers felt that this was because exporters had gone in for cover by receiving the premium, whereas the rates are still attractive. Also, banks, expecting further easing of premiums next week, in tandem with money market rates, have been receiving the premium.

The monthly premiums in paise were ruling between 12-14 for January, 29-32 for February, 53-56 for March, 75-78 for April, 96-99 for May, 117-120 for June, and 139-142 for July.