Spot Clocks 13-Paise Swing On $ Dearth

FOREX REPORT

The spot rupee saw a movement of 13 paise yesterday, to close lower than Friday's end. This was due to a shortage in supply and genuine demand from last week still prevalent. The forwards also dipped 4-to-6 paise, tracking the spot rupee movements.

"Today there was aggressive buying from corporates and most banks . There was a lot of importer demand as well which kept pushing the rupee lower. It reached each level only to sustain it," said a dealer with a private sector bank. "There was a shortage with the supplies of dollars being few," he added. The spot opened at 44.37, the day's high, gradually inching lower, to finally reach levels of 44.51, which went on to become the day's low. The rupee closed at 44.51 levels.

"There was no aggressive selling by the Reserve Bank of India (RBI). Today, if there is more volatility, we hope the RBI will step in to curb it," said a banker with a private sector bank.

The spot rupee is expected to remain within the range of 44.45 to 44.60. "Tomorrow there should be some more demand than today, due to certain overseas markets being open. That should cause some volatility but it is expected to be curbed in before it get out of hand," said a dealer with a foreign bank. It all depends on the RBI and the nationalised banks it wants to sell through and that will decide the range the spot rupee will stabilise at," said a dealer with a private sector bank.

The forwards moved in tandem with the rupee moving 4 to 6 paise. "It was a movement very similar to the movement of forwards on Friday. Once the rupee broke the 44.48, the forwards moved for the day," said a dealer with a foreign bank.

"The forwards did open lower due to a low money market call rate and there was some paying pressure but the movements still continued to track the spot rupee," he added.