Opening the day at 35.75, the rupee dipped to 35.78 but subsequently closed higher at 35.76, disclosing a modest 4-paise loss over the previous day's finish.
The State Bank of India (SBI), the largest commercial bank and a key forex market player, was in the market buying dollars for its clients. With the SBI in the market, the dollar slipped to Rs 35.78 but later regained its lost ground. "The rupee recovered because there was adequate supply of dollars in the market," a treasury head of a foreign bank said. The SBI was buying the greenback on behalf of its clients who wanted to meet their month-end demand.
Treasury heads expect that the rupee will be stable for some time as all the rollovers for the month have been effected. "There are no more rollovers left to be done for the month," a dealer said.
The Reserve Bank of India (RBI) was not present in the market. A treasury head said the RBI will make dollar purchases when the dollar is quoting at Rs 35.78, since it had already bought the US unit at a lower rate of Rs 35.72-35.73. The central bank had been in the market for the last two consecutive days, picking up dollars.
According to dealers, the month-end demand for dollars notwithstanding, the rupee would probably remain steady as the pressure was being nullified by the sustained supply of greenbacks. "A part of the dollars that were raised from the GDR issues are being routed through the forex market," a dealer said.
In the forwards segment, the six-monthly premium dipped to 192/195 paise. A dealer attributed this to the slide in the call rates which touched 0.5 per cent.