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RBI intervenes to hold prevent rupee rise

The Indian rupee opened steady and recovered marginally by 2 paise compared to Friday's closing. It hovered more or less in the same range throughout the day due to absolute negligible corporate demand coupled with surplus dollar supply in a dull and lethargic trading at the interbank foreign exchange market on Monday.

The rupee opened steady at Rs 36.19-20 and ruled between Rs 36.17-18 levels for the day following substantial dollar supply. But later, towards the close, the Reserve Bank of India entered the market and bought dollars in the range of Rs 36.175 and 36.1775 levels. The rupee finally settled down higher at Rs 36.175-185 levels at the fag end.

According to leading forex dealers, the Indian currency which opened steady immediately saw a rise of 2 paise where it hovered for the most part of the day. The rupee came under some pressure when the RBI entered the market just half an hour before the close and purchased dollar in the range of Rs 36.175-1775.

However, since there was not much demand from the corporates or any specific buyers the rupee closed higher towards the close, they said, and added that though being a month end the demand for dollar was reported negligible.

Meanwhile, the forward premia were reported lower by 2 to 3 paise over previous closing. They showed a difference of 5.62 per cent. The cash to spot dollar, which opened at 5 to 6 paise premium, closed at 2.5 to 3 per cent.

The forward premia were quoted at 14-15 paise for October, 28-30 paise for November, 45-47 paise for December, 66-67 paise for January, 78-81 paise for February, 97-100 paise for March and 115-118 paise for April.

On the other hand, the overseas market witnessed good volatility throughout the day but opened and closed almost steady, a dealer at the foreign bank said.

Elsewhere, the Reserve Bank of India fixed the reference rate at Rs 36.18 per US dollar for Monday.

UNI