Rupee Up A Notch On Buying Pressure

The rupee moved in the 35.69 to 35.73 range at the inter-bank foreign exchange market yesterday. The currency closed at 35.71-72 against the dollar, which is one paise higher than Mondays end-of-trade figure of 35.70-71.

And as on Monday, yesterdays market, too, saw appreciable buying pressure. Several domestic and foreign banks were found selling the greenback. Some export proceeds added to the inflows. On the demand side, the State Bank of India (SBI) was seen mopping up dollars at whatever rate offered throughout the day. Importers were also active in the market.

Most of yesterdays buying was for import cover since the forward premiums are at present attractive to importers. Buying interest was witnessed at the lower levels due to some murmurs floated among the players of a possible weakening of the rupee. According to dealers, there wasnt much of speculative buying yesterday.

 

The cash-tom and cash-spot stepped out of the negatives yesterday with both of them quoted at level -.5 levels.

Forward premiums, which tend to tail the call money rates in the Indian conditions, saw a rise yesterday after Mondays repos auction. This is because the auction is expected to have the effect of raising call rates.

The inter-bank call money rates rose yesterday to 3.75-4 per cent after ruling between 2-3 per cent for most of the period after the announcement of the credit policy.