Financial Daily from THE HINDU group of publications
Thursday, Aug 22, 2002
Financial Daily from THE HINDU group of publications Thursday, Aug 22, 2002 |
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Forex Money & Banking - Forex Rupee rises to 7-month high Our Bureau
MUMBAI, Aug. 21 THE rupee continues to gain strength against the weakening dollar. The local currency rose to a seven-month high of 48.54/5425 against the dollar on Wednesday. On Tuesday, the rupee closed at 48.5650/57. The domestic currency opened at 48.56/57 and touched an intra-day high of 48.5350 and an intra-day low of 48.5650. Dealers and analysts expect the rupee to remain stable in the near future. The dollar inflows continue to be good with exporters rushing in their proceeds, fearing further appreciation of rupee. "The Indian currency is expected to remain stable. But there will be depreciation by the year-end since India has much higher levels of inflation as compared to other countries,'' said Mr M.R. Madhavan, Interest Rate and Currency Strategist, Bank of America. The currency should touch 49.25 levels by March-end. This, however, was lower than six months premium which indicated 49.80 against the dollar, said Mr Madhavan. Whether the currency had reached its "fair value'' was a relative issue, he said. However, in the short term, market expectations are that there will be gradual strengthening of the domestic currency. "The currency is not likely to fall from its current levels. It is expected to remain at least in 48.50 levels for the coming week, unless there is some unexpected upheaval,'' said Mr R.V.S. Sridhar, Chief Dealer, Money & Forex, UTI Bank. The activity in the market was seen to be in the narrow band of 3-3.5 paise. Dealers observed a lack of demand for the greenback and as a result it was a supply-driven market. Importers are not booking forward dollars since the appreciation of the currency is anticipated. The forex market seems to be unaffected by the war tensions between the US and Iraq. The issue of oil payments does not seem a cause of worry for the rupee. The premiums fell slightly, which is a fall commensurate with the appreciation of the rupee. The margin of lowering of the premium has however decreased. The six-month premium closed at 4.25 per cent (4.30 per cent) and the 12-month premium closed at 4.35 per cent (4.38 per cent).
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