FOREX REPORT
The spot rupee strengthened yesterday following large dollar sales while forward premiums moved up marginally. The local currency closed at 43.6425 against the US dollar compared with 43.6550 last week. The rupee is expected to be rangebound while forwards could stay at current levels.
The spot rupee opened at 43.6550 yesterday and traded in an intra-day range of two paise. Dealers say large dollar supplies were available in the market.
"Dollar supplies were bunched up over the holidays, leading to a weakening of the dollar
today," said a dealer with a private bank. Nationalised banks were believed to be major sellers.
Forwards moved up marginally over their last week levels. A large nationalised bank was believed to be selling forward dollars for
the months of August and September. However, this was counterbalanced by the fact that
some foreign banks were buying forward dollars heavily.
"There is an apprehension of tightening in the market due to the forthcoming auction and this has also caused forwards to move up. However, the tightness is not expected to be long lived," said a dealer.
In the crosses, the rupee traded against the pound at Rs 68.22, against the euro at Rs 39.75 and at Rs 40.10 per hundred yen.
The closing levels of annualised premiums were: 1 month 2.02 per cent (2.24 per cent on Friday); 3 months 2.50 per cent (2.51 per cent); 6 months 2.69 per cent (2.65 per cent); 9 months 2.91 per cent (2.87 per cent); 12 months 2.94 per cent (2.92 per cent).
Cash tom and Tom-spot closed at 0.12-0.18 and 0.12-.0.25 while cash spot closed at 0.25-0.37.
