The spot rupee yesterday dipped to 36.60 against the dollar despite intervention by the Reserve Bank of India, even as forward dollar premia moved up on hectic buying in the inter-bank and merchant segments of the forex market.
The six-month forward dollar closed at 8.37 per cent, while the one-year closed at 7.8 per cent, compared with Thursdays close of 8 per cent and 7.25 per cent respectively.
The spot rupee weakened by five paise despite steady bouts of dollar-selling by the RBI, following strong corporate demand for dollars. However, it was forward trading that occupied centrestage yesterday.
While there was no volatility, the rupee slipped steadily in a market that was well bid. The RBI intervened in the spot as well as forward market, selling outright for October, January, February, and July.
Forward premia moved up by 5-10 paise across the board. While corporate interest was limited to the short term, inter-bank activity was maximum in the July dollar.
The July dollar, which closed at 247-252 on Thursday, closed at 257-262 yesterday. The March dollar opened at 161-163, and finally closed at 165-170, while August opened at 260-265 paise and closed at 271-276.
The spot rupee opened at 35.54-56 and slipped steadily through the day. By 12.00 noon, it had dropped to 36.555-565. By 2.30 pm, despite some intervention, it slipped further to 36.57-60. At the close, it was at 36.575-595.
The rupee was very well bid in both spot and forward market. Banks as usual aggressively bought from the RBI, which is the single largest seller in the market these days. Backed by good corporate demand, banks are buying up whatever the RBI is selling, said one dealer. Several dealers said they expect the rupee to remain under pressure in the short term. We should see the rupee ending slightly lower each day, said one.
