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RBI intervenes to keep to stall rupee appreciation

Despite the Reserve Bank of India's dollar bidding, the Indian rupee settled down almost steady compared to Thursday's closing in a fairly active interbank foreign exchange market on Friday.

The Rupee opened steady at Rs 36.19-20 per dollar and immediately started to appreciate, quoting at Rs 36.165/17 levels till the midsession. Later, the Reserve Bank of India, along with a few nationalised banks, entered the market and bought dollars which again pushed the rupee lower to Rs 36.185-20 levels.

The rupee finally settled down at Rs 36.19-20 per dollar at the fag end, witnessing a steady position compared to previous levels.

According to market sources, the RBI entered the market not exactly to provoke the US dollar but basically to ease the call rates which were on a firm note on Friday, and to bring in good liquidity in the system. Basically, it was a fairly active market with not much dollar demand, a dealer remarked.

The cash to spot was quoted higher at 6 to 7 paise premium while cash tom was quoted at 2.25 to 2.5 paise premium for the day. The forward premiums were quoted lower by about 5 paise compared to Thursday's closing levels.

The forward premiums were quoted at 16-17 paise premium for October, 32-33 paise for November, 49-51 paise for December, 69-71 paise for January, 83-85 paise for February, 101-103 paise for March, 120-121 paise for April, and 140-142 premium for May.

On the other hand, the US dollar witnessed two way trading in the overseas market strengthening against the pound sterling and weakening against various other European currencies.

Meanwhile, the Reserve Bank of India fixed the reference rate at Rs 36.22 per dollar for Friday, over Thursday's fix of Rs 36.23 per dollar.

UNI