COMMENTARY
INTERVIEW
SPECIALS
CHAT
ARCHIVES

Strong signals given by the finance ministry and the Reserve Bank of India on the economic fundamentals of the country on Wednesday stabilised the volatility in the forex market with the rupee firming up smartly by about 6 paise against the US greenback to close at Rs 36.53-54 per dollar, without any intervention by the apex bank.

Dealers said the currency opened higher at Rs 36.54/57 and suddenly started being quoted at Rs 36.42-44 level around 1140-1200 hours IST, soon after the RBI governor's statement was released by the media. They added that ''it was the market of corporates and not of speculators.''

They said there was no panic like condition reported on Wednesday like the last two days. ''The importers have covered import remittances in last two days and on Wednesday, there was no import covering.''

''The RBI would like the rupee to move in the range of Rs 36.40-42 per dollar and the rupee is unlikely to depreciate further," opined a senior forex dealer.

What can be described as rapid action, the central bank on Wednesday fixed the reference rate at Rs 36.45 per dollar, 20 paise lower from the previous rate of Rs 36.65.

The State Bank of India made purchases at the higher level of Rs 36.47-49 and also at 36.52 levels, dealers said.

The six months forward premia also recovered smartly. The RBI was seen receiving in the forwards particularly in September and October deliveries, dealers said.

In New Delhi, Finance Minister P Chidambaram said his ministry has directed the RBI to take all possible steps to curb speculation in the forex market and further said that the central bank has decided to intervene continuously to keep the exchange rate stable.

In Bombay, Reserve Bank of India governor C Rangarajan has also issued a statement in which he said that there has been no basic change in the fundamentals of the economy which continue to remain strong. Market participants both in the spot and forward are therefore, advised to take note of the basic trends.

Against the pound, the rupee opened at Rs 57.98 on Wednesday, and after witnessing more or less a steady trend, it closed at Rs 57.86 per pound.

The forward premiums in paise were September 16-17, October 38-40, November 59-61, December 83-86, January 102-105, February 122-126, March 134-137, and April 167-172.