FOREX REPORT
The spot rupee went through another round of dull trading yesterday, closing at 43.9700, unchanged over Tuesday's levels. The forward premiums dipped marginally due to heavy receiving by banks in the near and far ends.
The spot rupee opened at 43.97 and stayed at the same level, with dealers reporting that nationalised banks were selling dollars through out the day.
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Except for a few moments when it dropped to the day's low of 43.99, the spot rupee stayed stable.
"Late afternoon, the nationalised banks withdrew for some seconds and within a flash the rupee dropped to the 43.99 levels," said a dealer with a foreign bank.
"The (nationalised) banks immediately came in and brought the rupee back to its closing level of 43.97," he added.
"It shows that the inherent demand still exists, and if there were to be no intervention, the rupee would reach the 44.15-44.20 levels," said a dealer with a private sector bank.
Market players feel that the supply in the market is at present fully controlled by the State Bank of India (SBI) and other nationalised banks at the behest of the Reserve Bank of India (RBI).
The forwards came off by six-seven paise due to "simple receiving (selling forward) by most nationalised banks".
The nationalised banks were aggressively recieving on behalf of RBI, especially in the near-term," said a dealer with a foreign bank.
Another reason cited by most bankers was the hike in the interest rate by the US Federal reserve on Tuesday, which has narrowed down the gap between domestic and overseas interest rates.
The spot rupee is expected to remain in the current range of 43.93-44.05 on Friday, unless the central bank deems it otherwise for Friday.