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Rupee springs back

The rupee made a smart recovery against the greenback on the last trading day of the current financial year in an active interbank foreign exchange market.

It opened higher at Rs 35.91/95, compared to the previous close of Rs 35.89/90. Later it started weakening and was quoted at Rs 35.97/99 during the day and finally at the fag end due to a selling pressure recovered moderately by 4 paise and closed at Rs 35.88/89 per dollar.

Dayanand Nayak, chief forex dealer at the Corporation Bank said that in the morning the political situation had some impact on the rupee which was quoted lower at Rs 35.98/99. Few banks were reported to be squaring up positions ahead of a holiday on Tuesday and previously two days' credit which resulted in larger speculation.

He said that one or two deals were reported at Rs 36 level during the day. Later in the afternoon session the rupee started gaining and made a handsome recovery following heavy dollar selling pressure.

On the other hand the overseas market was reported quiet and dull as the major European banks were closed.

The Reserve Bank of India maintained the reference rate at Rs 35.91 per US unit.

Nayak said that importers did not enter the market and the rupee appreciated. The forex dealers said that recently there have been several dollar inflows which had a strong impact on the rupee. But the ongoing political developments may affect inflows and even spark an outflow of dollar.

The forward premiums opened higher compared to the previous week's levels. But as lots of dollar supply was reported, the dollar premia lowered by 2 to 3 paise per month.

The cash to spot dollar opened at 4 to 5 paise level, went up to 10 paise due to a last trading day and settled down at 6 to 7 paise towards the close.

The six month premia were quoted at, spot/April 13-15, spot/May 33-36, spot/June 54-57, spot/July 75-78, spot/August 96-98, spot/September 117-120 and spot/October 135-138 paise premia respectively.

UNI