Rupee Plunges On Poor Sentiment

FOREX REPORT

The rupee slipped sharply vis-a-vis the dollar to close at 39.20-23 as against Fridays close of 38.92-94. The Indian currency touched a low of 39.25-28 just a while before closing.

One-month premiums closed at 13.69 per cent (as against 12.54 per cent on Friday), three-month at 16.82 per cent (16.75 per cent), six-month at 13.51 per cent (15.95 per cent), and one-year at 14.08 per cent (14.28 per cent).

The spot rupee opened at 38.94-96 and then crossed the 39-barrier. Some players expected the Reserve Bank of India (RBI) to intervene but the central bank stayed away from the market through out the day. Forward premiums shot up only to decline by the end of the day. It was the inter-bank trading that took premiums up in the morning. Market players attributed the movement to increased covering by corporates.

 

Yesterday cash tom was 1-1.5 paise, cash spot 1.5-2 paise and tom spot closed at 0.5-1 paise.

Monthly premiums (in paise) closed at : 1-2 for February, 50-55 for March, 118-123 for April, 170-175 for May, 219-224 for June, 270-275 for July, 310-315 for August, 350-355 for September, 390-395 for October, 430-435 for November, 470-475 for December, 510-520 for January 1999 and 540-560 for February 1999.

In the crosses, rupee closed at 64.14 against the pound, 21.58 against the mark, and 30.47 per 100 yen.