Re Range-Bound, Forwards Slip A Shade

Dealers attributed this to the fact that the demand for dollars was matched by its supplies. The spot rates were, therefore, quoting around Tuesday's figures. Market players expect the Indian currency to remain in the same band for the better part of the week.

Opening the day between 35.69 and 35.71, the rupee fell to 35.74 on moderate dollar purchases by a few regular buyers, particularly the State bank of India (SBI). According to dealers, the demand for dollars from other banks and importers was slack.

This, coupled with a sell-off in the US currency drove up the rupee to 35.71. Though the rupee was quoting between 35.69 and 35.73 for most of the day, the rates closed in the region of 35.72 to 35.73.

 

Forward dollar premiums also edged up from Tuesday's quotes but market players feel that the firming up is only transitory.

Further, they perceive that the premiums would hover around the present level, at least till the end of the week. Premiums, both on the short as well as the long-term, hovered around the previous day's figures. Monthly rates were quoting at 10/13 paise for September, 41/44 paise for October, 72/75 paise for November, 105/108 paise for December, 146/149 paise for January, 177/180 paise for February, 206/209 paise for March. The annualised rate works out to 10.5 per cent, a modest 0.1 point lower than Tuesday's 10.5 per cent.

In the international markets, the greenback was firm against major currencies, although it gained marginally against a few of them. Dealers said the dollar had hardened on the possibility of a hike in interest rates expected to be announced at the FOMC meeting September 24.