Rupee Closes Lower, Forwards Slip Further

FOREX REPORT

Trading picked up in the inter-bank forex market yesterday, resulting in the rupee closing lower at 35.86-87 as compared with Mondays close of 35.85-86. The forward premiums weakened further with the six-month annualised closing at 6.96 per cent.

With the Reserve Bank of India (RBI) hitting the banks for dollars at the close of Monday, several banks were short. Hence, they sought to buy dollars, particularly in the morning, causing the American unit to open relatively higher at 35.86-87 yesterday. Dealers reported some rise in corporate demand also. The apex bank entered the market yesterday buying the greenback at 35.86-87. A dealer said SBI was also seen purchasing dollars at rates being quoted by the market for most of the day. This saw the dollar climb to a high of 35.87-88.

 

However, towards the close, demand pared off. Also, a dealer reported that the SBI was selling dollars. This caused the rupee to strengthen to the closing levels.

The cash-tom was -.75/ level paise, the tom-spot was -.5/+.5 paise, and the cash-spot was -1/level.

The forwards segment saw the premiums softening further. While the drop in the near-term premiums is attributed to low call rates, receiving pressure is said to be responsible for the far-term premiums, particularly July, moving downward.

The monthly premiums in paise were -.5-1 for January, 7-10 for February, 28-31 for March, 54-57 for April, 78-81 for May, 100-103 for June and 123-125 to July. The one-year forward premiums were 230-263 paise.