Spot Rupee Closes At 44.56, Forwards Soft

The spot rupee continued to slide, closing at a new low of 44.56 Tuesday. It saw an intra-day low of 44.58. Forwards came off by 4-6 paise on account of the devolvement by the Reserve Bank of India (RBI).

"Once the spot rupee hit the 44.58 mark, the State Bank of India (SBI) capped the spot rupee at these levels and most business got done at these levels," said a dealer with a foreign bank.

"There was a reasonable corporate demand for dollars, but not from any one particular industry or sector. There was genuine customer demand, with export cancellations and nationalised and foreign banks purchasing. This could be residual demand from last week or fresh demand, either way, it gets stemmed once a nationalised bank comes in as a seller," said a banker with a private sector bank.

Yesterday, most nationalised banks were buying dollars aggressively, SBI being an exception, which was found selling throughout the day.

Today, the spot rupee is expected to remain within the range of 44.45-44.60.

"We do not expect it to cross the 44.60 mark, with due intervention from RBI, directly or indirectly. But if there is no intervention, it could reach 44.70 levels," said a dealer with a private sector bank.

The forwards came off by 4 to 6 paise due to an easy call rate and comfortable liquidity position.

"It opened on an easy note, remained soft throughout the day and closed lower than its previous day's close," affirmed a dealer with a private sector bank.

The forwards opened lower due to the RBI devolvement on Monday, easing liquidity concerns in the system.

"The nervousness on the rupee has reduced and there is easy money with the money market call rate being at 7 per cent," said a broker.

"It will ensure that the forwards will remain in the same range even tomorrow, unless the rupee dips without any intervention," he added.