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Day of ups and down in forex market

Hectic transactions were witnessed at the interbank foreign exchange market on Friday following good demand from corporate sectors and the State Bank of India.

The market opened at Rs 36.215-225 per dollar, due to overnight short covering by the local commercial banks and SBI on behalf of their clients.

It went up to Rs 36.27-275 in the morning session of trading. Later, exporters entered the market and started booking profits at higher level, which drifted the Indian rupee further lower to Rs 36.22-23 per dollar at the close, dealers said.

Another dealer said that importers have adopted a wait-and-watch attitude at this juncture since the US greenback had been quoting in the range of Rs 36.20 and Rs 36.22 for the past few days.

They may get panicky if the dollar crosses the Rs 36.30 level, said a dealer.

The annualised forward premium gone up to 5.21 per cent as Reserve Bank of India had bought the October dollar on outright basis, dealers said.

The monthly forward dollar premiums remained steady as there were marginal transactions in the swap section. Cash to spot dollar opened at 0.12 to 0.25 paisa premium and at the fag end it was traded also at level.

Spot to October dollar was traded between 4-6 paise premium. Spot/November was quoted at 16-18 paise premium and Spot/March dollar traded between 84 and 87 paise premium.

Nominal booking was observed on export and import counters in cash and spot basis and there was no export booking in the near forward and far forward in the merchant section.

Being a holiday in Tokyo and Hong Kong, the overseas market also remained quiet with only a few deals conducted in the overseas market, dealers added.

Elsewhere, the Reserve Bank of India fixed the reference rate at Rs 36.26 per US dollar.

UNI