The rupee closed at 43.08-12, slightly weaker than Wednesday's close of 42.95-43.05 and the six month forward dollar premiums crashed 35 paise amid good two-way trade and improved sentiment. Forward premiums crashed on heavy receiving as banks' stop-losses were triggered as corporate demand fell short of expectations. Premiums closed at 7.96 per cent for one month (8.06 on Wednesday), 8.46 per cent for six months (9.03), and 9.20 per cent for 12 months (9.55).
While the dollar was bid, there was an unexpected surge in supplies as corporates sought to book profits. Dealers said they had requests from corporate clients to buy on dips and sell on peaks. This resulted in good two-way trade.
The market saw some amount of volatility as the rupee moved back and forward in the 43 to 43.25 range. While nerves were calmer yesterday, dealers said the outlook remained uncertain on account of the continuing Asian crisis. "We will continue to watch the Japanese yen, the Hongkong dollar, and the Chinese yuan," a foreign bank dealer said. The Japanese yen strengthened to 144.70 from 147 against the dollar yesterday.
