FOREX REPORT
The rupee closed at 35.7000/7050 versus the dollar in lacklustre trade at the inter-bank forex market yesterday, dealers said.
The day opened steady at 35.69/70 with the rupee expected to move in a tight range in anticipation of continued Reserve Bank of India (RBI) action to prop up the dollar.
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The apex bank kept behind the scenes but was buying dollars from those who went to it , a dealer at a foreign bank said. Many dealers had expected the State Bank of India (SBI) to resume dollar purchases, saying it was quite some time since the bank had bought dollars.
SBIs purchases usually move the spot rupee-dollar market though of late the bank has gone slow on its buying and allowed the central bank to move into the centrestage.
SBI was bidding at 35.7050, but was not active, said a dealer at another public sector bank. Dealers said the forward dollar market saw some paying pressure, referring to payment of premiums to book forward dollars. June dollars closed two paise higher at 135 paise, said a dealer. The six-month annualised premium ended Thursday at 3.75 per cent compared with the previous close of 3.52 per cent. One dealer attributed the spurt in premiums to an auction of 50-billion-rupee government stock scheduled for Monday. Thats a big amount, said a dealer. For the first time, the market is sitting up and wondering if anything is happening to the excess liquidity we have been used to in recent months.
But dealers said the excess liquidity with banks was so huge that the auction would not make a major dent.
Its just that people are a little cautious for a few days, a dealer said.