Rupee Hardens, 6-Month Forwards Easy

FOREX REPORT

The rupee appreciated against the dollar, closing at 35.82-83 despite nominal intervention by the Reserve Bank of India (RBI) in the inter-bank forex market yesterday. Forward premiums remained soft with the six-month annualised closing at 4.76 per cent.

The spot rupee opened at 35.84-85. In the morning, the statement of the finance minister P Chidambaram that the rupee was at the right levels and did not warrant RBI intervention, saw it climb up slightly to 35.82 levels. However, it slipped to 35.845 with nominal RBI intervention. Once RBI left the market, the rupee strengthened towards the close levels.

 

The cash-tom and tom-spot closed at .25/.5 paise. The cash-spot closed at .5/1 paise.

The forward premiums eased as receiving pressure continued to outstrip paying pressure. The RBI did not intervene in the

forex markets.

Monthly premiums in paise were 3-5 for May, 12-15 for June, 25-28 for July, 42-45 for August, 59-62 for September, 75-78 for October and 87-90 for November. One-year premiums were 156-161 paise.

Overseas, the dollar fell sharply against other major world currencies. Bank of Japan has hinted at a target rate of 103 yen to a dollar.

The Federal Reserve has ruled out the possibility of a further interest rate hike on the dollar. The rupee closed at 57.90 against the pound, 21.17 against the mark and 30.25 per 100 yen.