Re Ranged, Forwards Up 2 Paise

A volatile market saw spot rupee move in a very narrow range of 7 to 8 paise yesterday. The forwards saw very little movement, rising 2 paise to close higher than Thursday's levels.

"It was a volatile market with a lot of movement," said a dealer with a private sector bank. "There was general confusion in the market, with most dealers not knowing whether it was headed up or down," the dealer added.

It opened at 43.8500, traded within an intra day range of 43.9550-43.9600 and 43.8500, to close at 43.9200.

The spot rupee traded in moderate volumes with there being movement in the market at all times.

 

"There was enough corporate and customer demand, but just about adequate supply of dollars, with the State Bank of India (SBI) being the only seller," said a dealer with a foreign bank.

"Today, a lot of buyers were expecting the SBI to keep the spot rupee at constant levels, which it did," said a dealer with a private sector bank. "It did so by selling throughout, being the only supplier for the market," he added.

The demand for the greenback has gone up in the last two days of trading.

With the main source of inflow, the FIIs, becoming negative and they (FIIs) themselves becoming an outflow, the supply corners have reduced, thereby making the demand felt more severely.

As per a circular issued by the Reserve Bank of India (RBI), the reference rate for the dollar is Rs 43.92 as on May 12 as against Rs 43.84 as on May 11.

The forwards saw very little movement yesterday, with an aggregate move of 2 paise.

"The market was very biddish and a little jumpy, not going in any particular direction," said a dealer with a private sector bank. "They closed slightly lower than Thursday's levels," he added.