Spot In A Groove, Forwards Hold Steady

FOREX REPORT

The spot rupee did not move much yesterday, very little as compared with Wednesday, probably because there was enough supply to satisfy existing demand.

Forwards stayed steady at their current levels, dipping an overall 3 to 4 paise.

"The market was quite thin, with very few buyers. All are exercising caution and waiting," said a dealer with a private sector bank. "Today, the confidence was slightly better than yesterday," he added.

Despite the general optimism, some dealers feel that "the rupee is going only one way- down".

Alok Sharma, vice-president, head of foreign exchange trading, Bank of America, contended it was "a normal working day. Everyone was buying and selling, with more people selling throughout the day."

 

Said a dealer with a private sector bank, "We have to wait and watch. There is an inherent demand for dollars in the market and tomorrow when all the players are present, we will know".

Another dealer from a foreign bank said, "Many people thought that the rupee would touch and remain at 44.15 to 44.20 levels, but we were sure that it would fall and reach 43 levels."

Yesterday the rupee closed at 43.8750, confirming that the rupee would not stabilise at 44 levels but at 43.85 to 43.90 levels.

Forwards remained steady, dipping 3-4 paise. The 6-month (annualised) dipped 2 paise to close slightly higher than Wednesday. The 1-year (annualised) also closed higher than Wednesday by 2 paise.

"They (forwards) are likely to remain in the same range even tomorrow, unless some major activity takes place in the spot rupee, the forwards will stabilise," said a dealer with a private sector bank.