FOREX REPORT
The rupee weakened against the dollar yesterday on statements from the International Monetary Fund (IMF) and ministry of finance that downside risk on the rupee continued, necessitating a tight monetary policy, foreign exchange dealers said. It closed at 42.54-56 compared with 42.49-50 on Tuesday.
The forward rupee was volatile with premiums rose by over 100 basis points for near-to-medium maturities. Dollar premiums closed at: 1-month - 7.63 per cent (6.33 per cent on Tuesday); 3-month - 7.9 per cent (7.01); 6-month - 8.55 per cent (7.83); 9-month - 8.44 (8.39); 12-month - 8.9 per cent (8.61).
Spot rupee opened at 42.49-51. However, buying interest in the forward market resulted in some weakness in the spot rupee.
It dipped twice to 42.5675, and recovered on dollar sales by the State Bank of India (SBI).
Cash-tom was .25/.5 paise, tom-spot was .25/.5 paise, and cash spot was .50/1 paise. Dollar premiums shot up on cautious corporate covering.
The SBI entered the market in two rounds receiving dollars (buy-sell swaps) to ease pressure on premiums.
Premiums (in paise) closed at: Sep - 2-3; Oct - 30-33; Nov - 58-63; Dec - 86-91; Jan - 121-126; Feb - 152-157; Mar - 183-188; Apr - 218-213; May - 253-258; Jun - 288-293; Jul - 321-326; Aug - 351-356. In the crosses, the rupee closed at 71.44 against the British pound, 25.14 against the German mark and 31.17 per 100 Japanese yen.
