FOREX REPORT
The rupee weakened against the dollar in the face of brisk demand for the American currency in the inter-bank forex market yesterday. It closed at 35.88-89 levels. The forward premiums also strengthened on account of increased paying pressure with the six-month annualised premium closing at 7.4 per cent.
The rupee opened at 35.86-87 levels. Aggressive corporate demand, particularly from large corporates, saw banks actively bidding for the greenback in the spot market. In the first half of the day, dealers reported the presence of south-based banks, and in the second half, the State Bank of India was bidding for the dollar. The price of the dollar rose as high as Rs 35.89-90. Dealers attributed the increased demand to month end pressure. The cash-tom was -.5/level, the tom-spot was -.5/level, and the cash-spot was -.5/.5 paise.
The forwards segment, although not as active as the spot, saw some brisk trading. There was upward pressure on the forward premiums due to month end paying pressure. Importers were in the market booking forward, particularly for the near term. Besides, corporates were reported to be rolling over their forward contracts. The monthly premiums in paise were 9-12 for February, 30-33 for March, 57-60 for April, 78-81 for May, 103-106 for June, 129-132 for July, and 149-154 for August. The one-year forward premiums were 255-275 paise.
