Rupee Touches New Low, Forwards Slip

FOREX REPORT

The rupee sunk to a new low against the dollar following continued intervention of around $100 million by the Reserve Bank of India (RBI) in the inter-bank forex market yesterday. It closed at 35.875-885. Forward premiums dipped slightly as exporters continued to sell their forward remittances. Six-month annualised premiums closed at 5.04 per cent.

The spot rupee opened at 35.845-855. The RBI entered the market twice-at 11:30 am and at 12:30 pm. The rupee climbed to the intra-day high of 35.89-90. After it pulled out of the market, the SBI entered unexpectedly, selling dollars. This pulled it down to close levels.

 

The cash-tom was .25/1.25, the tom-spot was .5/.5 and the cash-spot was .75/1.75 paise.

Forward premiums slipped as exporters continued to receive in the market. The RBI has made no attempt to support the forward dollar. Monthly premiums in paise were 4-6 for May, 14-17 for June, 29-32 for July, 47-50 August, 64-67 for September, 81-84 for October, and 93-96 for November. One year premiums were 177-187 paise.

Overseas, the dollar went through a bearish phase against other major currencies. Expectations of a hike interest rates in UK, good data on the German economy and expectations of intervention by the Bank of Japan saw the dollar slip against major currencies. The rupee also weakened against these currencies closing at 58.69 against the pound, 20.87 against the mark, and 28.67 per 100 yen.