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RBI intervenes to lower forward premiums

The spot rate of Indian rupee also registered a marginal gain over the previous close following dollar selling pressure from corporates coupled with cancellation of import bookings by the importers.

The Indian rupee opened at Rs 38.95-39.00 per US dollar, lower than the overnight finish at Rs 38.75-78, gradually firmed up to Rs 38.72-75 by the midday trading. State Bank of India, the prominent player, was in the market but not very active, dealers said.

The SBI made some purchases at the rate of Rs 38.75 while the rupee firmed up smartly to Rs 38.70-72 per US unit after the SBI's departure in the market, leading forex dealers said.

The Indian currency gained by five paise over the previous close.

In the forwards, the RBI entered the market and received forwards in July when the forward premia touched a new peak of 410-425 paise. Then July premium came down sharply to 360-370 paise towards the close.

With the RBI's intervention most of the premiums came down substantially from their overnight finish, dealers said.

The higher call money rates also has affected the forwards as well as spot market. The cash-spot business was done between 32-35 paise premium level at opening and before closing at 20-23 paise premium at the fag end of the trading.

The monthly forward premia of January came down to 10-12 paise premium from 43-48 paise premium, February premia closed at 130-140 paise from 143-152, March at 210-220 from 215-225, April at 260-270 from 275-290, May 300-310 from 330-360, June at 345-355 from 380-400, July at 360-370 from 410-430 paise premium.

In the cross currency deals, the Indian unit closed at Rs 63.47-50 as against the previous close of Rs 62.76 and at Rs 21.38-40 as against the mark while it finished at Rs 30.50-52 against the yen (100 yen).

The Reserve Bank of India fixed the reference rate at Rs 38.88 per dollar as against yesterday's fix of Rs 38.96.

UNI