Rupee Down A Touch, Forwards Stay Soft

FOREX REPORT

The rupee slipped slightly against the dollar following aggressive dollar buying by the Reserve Bank of India (RBI) and the State Bank of India (SBI). It closed at 35.795-805.

The forward premium remained soft with the six month annualised closing at 4.44 per cent and the annual premium at 4.4 per cent.

In the spot market the rupee opened at 35.76-77. It remained steady in the morning till the RBI and SBI entered the market in the afternoon. Their purchases pushed rupee to an intra-day low of 35.80-81. After the RBI withdrew from the market, the rupee notched up 1.5 paise to close levels.

 

The cash-tom, tom-spot and cash-spot closed at 0/.5 paise. In the forward segment, receiving pressure kept the premiums down. The importers continued to keep out of the market. With call rates ruling low, there has been some pick up in arbitrage activity. However, this has been only nominal.

Monthly premiums in paise were 4-6 for June, 13-16 for July, 25-28 for August, 41-44 for September, 58-61 for October, 72-75 for November, 87-90 for December, 102-107 for January, 116-121 for February, 132-137 for March, 149-154 for April, 165-170 for May.

Overseas, the Bank of England has hiked the UK interest rates by 25 basis points to 6.5 per cent. This saw increased activity in the pound. The rupee closed at 58.20 against the pound, 21.61 against the mark, and 30.92 per 100 yen.