Rupee Moves In A Narrow Groove

FOREX REPORT

The rupee moved in a narrow band of two paise, closing at 36.505-515 against the dollar in the inter-bank forex market yesterday. The forward premiums eased in the near-term with the six-month closing at 7.86 per cent. One-year, however, closed firmer at 7.09 per cent.

The Reserve Bank of India (RBI) consistently intervened in the spot and forward segments.Spot rupee opened at 36.48-50. It moved down to 36.50-51, then recovered to 36.49-50 before recovering to close levels, as the RBI moved in and out of the market.

However, the RBI was quite successful in preventing volatility. Cash-tom was 0/.25 paise, tom-spot was .25/.5 paise, and cash-spot was .5/.75.

 

The forward premiums came off for the near-term as the apex bank kept up its intervention. The central bank was selling for November, January, and February. Corporate covering continued to be active with importers in the market covering their near-term.

Monthly premiums (in paise) closed at 16-19 for September, 41-44 for October, 63-65 for November, 90-92 for December, 112-115 for January, 132-135 for February, 152-155 for March, 172-175 for April, 182-185 for May, 213-216 for June, 234-237 for July, and 250-255 for August.

In the crosses, the mark weakened against the dollar following the Bundesbanks statement that the marks present parity with the dollar was desirable. The rupee closed at 58.05 against the pound, 20.10 against the mark, and 30.14 per 100 yen.