The rupee was stronger against the dollar in the inter-bank foreign exchange market yesterday.
Opening the day between 35.69 and 35.71, the rupee dipped to 35.72 largely due to the expectations of an increased dollar demand from the State Bank of India (SBI). It, however, recovered to 35.68 when SBI did not buy as much as expected. And, all this within the first ten minutes of trading. The Indian currency later gained more ground and closed higher at 35.66.
Dealers attributed the late-session decline in the dollar to the lack of demand, even as the supply was forthcoming. Many foreign banks were reported to be selling greenbacks. The Reserve Bank of India, (RBI), was conspicuous by its absence. The spot cash premiums continued to rule in negative figures. The cash tom and the cash spot were quoted at -0.25 per cent. The discount of the spot dollar over cash indicated zero arbitrage activity. The forward premiums were easy because of the receiving pressure, especially for the months of March and April. The annualised forward premium stood at 6.5 per cent.
The monthly rates in paise were quoted at 3-5 paise for November, 16-19 paise for December, 38-43 paise for January, 60-65 paise for February, 88-93 paise for March, 110-115 paise for April, and 129-132 paise for May.
