Rupee Ends Weaker At 44.36 Vs $

FOREX REPORT

The rupee ended sharply weaker on Friday, recording a new closing low at 44.36 per dollar compared with Thursday's 44.05/10. The forwards did not move much, and came off by 7 to 8 paise to close lower than the previous day.

"Yesterday's pulling down of the rupee was stretched even further today. It reached the levels of 44.36-44.38 and most of the business was done at these levels. It fell from the day's low of 44.38 to it's close at 44.37," said a dealer with a foreign bank.

"Today's demand was most certainly genuine corporate demand, unlike yesterday when most which was speculative and was even due to some amount of panic caused by the spot rupee," said a dealer with a private-sector bank. Dealers said that exporters had chosen to stay off the market and import demand in trickles had caused the gradual slide. The central bank did not intervene in the spot market, though state-run banks had lowered quotes in afternoon trade to keep a check on the rupee, they said.

 

Subir Biswas, country treasurer, ABN Amro said, "Today, it was far better than yesterday with the rupee being less volatile and the demand genuine."

The forwards moved very little throughout the day, unlike its previous day's leap of over 20 paise.

The six-month premium ended Friday at an annualised 2.88 per cent compared with Thursday's 3.08. Dealers said state-run banks had received premia in the forward market, which kept premiums soft despite import paying.

In the coming week, dealers see the rupee settling between 44.30 and 44.50. "This is possible unless the RBI would like to see the rupee settle at a level lower than the one it has already sought," said a broker with a private-sector bank.