Cash-spot spreads spike to record high of 46 paise over huge dollar supply

Massive dollar surplus increased demand for rupee liquidity

A huge surplus of dollars in the market shot dollar-rupee cash-spot spread to a record high of 45-46 paise, from its usual 3-5 paise on the last working day of the fiscal 2018-19, partly because banks that failed to swap their dollars with the Reserve Bank of India (RBI) on March 26 had to shed their dollar holding to get rupee liquidity. 

Cash-spot is an interbank market that witnesses huge volume of transactions. The market comprises three rates — spot, cash and tom (short for tomorrow). 

A “spot rate” is one at which a deal is settled in the second working day