FOREX REPORT
Forwards fell yesterday following a softening in the call money rates. The spot rupee continues to be range-bound for the day. It closed at the same level as yesterday of 43.61.
Market players feel that the forward premiums are likely to fall next week, while the rupee may also lose value due to month-end demand.
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The call money market eased somewhat yesterday to a range of 12-15 per cent as the RBI conducted open market operations to increase liquidity in the market. This led to dealers bidding down the premiums.
January dollar swaps fell from 121 paise to 119 paise, while December fell from 111 paise to 109 paise.
Most of the action over the past few days in the forward market has been from foreign banks who conducted sell-buy swaps to stay liquid in a tight call market. "Corporates were definitely not in evidence in the past few days activity in the forward market," said a dealer with a private bank. "Both importers and exporters stayed away and this points to a divergence of views on where forwards are headed."
The spot rupee opened at 43.61 and traded in a one-paisa range between 43.61 to 43.62 for the day.
Dealers say that the spot rupee could slip somewhat for the following week due to month-end demand in the market from corporates, especially oil companies. Forwards could slip as there is a feeling that call money rates could ease up.
In the international markets the yen remains weak against the dollar at 110.35 at the time of the close of the Indian market. The pound is traded at $1.6108. The euro was traded against the dollar at 0.9918.
Dealers say that the Euro remains weak against the dollar despite good economic data and is unlikely to reach parity with the dollar soon.
The closing levels of annualised premiums were 1 month - 4.3 per cent (4.8 per cent on Thursday); 3 months - 3.334 per cent (3.54 per cent); 6 months - 3 per cent (3.09 per cent); 9 months - 2.9 per cent (2.98 per cent); 12 months - 2.86 per cent (2.92 per cent). Cash tom and Tom-spot closed at 1-1.5 and 4.5-5.5, while cash spot closed at 4.5-5.5.
Premiums in paise closed at February - 6.5-8.5 (8-10 on Thursday); March - 17-19 (20.5-21.5); April -27-29 (30-31.5); May - 37-39 (40-41.5); June - 47-49 (49-51); July -57-59 (59-61); August - 67.5-68.5 (69-71); September - 77.25-78.25 (79-81); October - 87-88 (89-91); November - 97-98 (99-101); December - 107-109 (109-111) ; January - 119-119 (119-121).
The rupee closed against the euro at Rs 43, against the pound at Rs 69.93 and against 100 Japanese yen at 39.32.