Forex Report
The rupee recovered after an early weakening as the market quickly discounted news of international rating agency Standard and Poors' downgrading India to BB. The State Bank of India (SBI) intervened to support the rupee, dealers said.
It closed at 42.28-29 against 42.29-30 on Tuesday.
The forward rupee weakened on month-end demand, they added. Dollar premiums closed at: 1-month - 5.75 per cent (5.90 per cent on Tuesday); 3-month - 7.57 per cent (6.75); 6-month - 8.32 per cent (7.90); 9-month - 8.55 per cent (8.30); 12-month - 8.83 per cent (8.03).
Spot rupee opened at 42.29-30. Early short covering by banks in anticipation of possible rupee weakening saw it to weaken to 42.42. But the SBI quickly stepped in selling dollars.
It recovered to hover around 42.30 for most of the day. But, in late noon trade, when it started appreciating towards 42.27, the SBI turned buyer to contain its rise .
Cash-tom was 1.25/1.75 paise, tom-spot were .25/1.25 paise, and cash-spot was 1.75/2.25 paise.
Dollar premiums firmed by four to nine paise across maturities on month-end corporate covering, dealers said.
Premiums (in paise) closed at: Nov - 21-22; Dec - 50-52; Jan - 80-82; Feb - 110-111; Mar - 142-144; Apr - 174-177; May - 208-210; Jun - 240-243; Jul - 273-276; Aug - 306-309; Sep - 339-342.
In the crosses, the rupee closed at 71.51 against the British pound, 25.74 against the German mark, and 35.65 per 100 Japanese yen.
