Rupee Nudges Its Way Up, Forwards Harden

FOREX REPORT

The rupee was stronger against the dollar amid lacklustre trading in the inter-bank forex market yesterday. It closed at 35.85/86. The forward premiums rose further in the face of paying pressure from various quarters. The six-month annualised rates closed at 8.2 per cent.

Trading in the spot market was dull. There was not much selling pressure or buying activity either. The rupee opened at 35.87/98. However, with no demand, and little corporate selling, it strengthened by two paise towards close. Neither the State Bank of India (SBI), nor the Reserve Bank of India (RBI) were actively trading during the day.

 

The cash-tom was quoted at 0.25/1 paise, tom-spot was at l/.25 paise, and the cash-spot was .25/1.25 paise.

In the forward segment, the premiums continued to increase with paying pressure mounting from several fronts, particularly the importers. Several banks are swapping their FCNR(B) funds into rupees for lending purposes and thereby bearing the premium on them. This has put an upward pressure on the forward rates. Profit taking by corporates was also believed to have occurred.

The monthly premiums in paise were 8-14 for January, 29-32 for February, 59-62 for March, 86-89 for April, 110-113 for May, 135-138 for June, and 159-162 for July. In the one-year forward section, dealers reported a few deals. The premium was 285-305 paise.