The Hindu Business Line : Rupee down marginally

The rupee ended about five paise lower than the dollar, in a market that hardly saw movement. The rupee opened and closed at the same level of 42.97, slightly lower than Friday’s close of 42.92/95. “There was no movement in the spot market. The RBI was supporting the spot rupee by selling dollars, or else the rupee would have depreciated even further,” said a forex dealer with a private bank. The forward premia for the six-month closed at 3.98 per cent (3.95 per cent) and the 12-month at 3.63 per cent (3.5 per cent). During the day, the premia crossed four per cent, due to fears of higher inflation and further rate hikes by the RBI, said dealers. But the comments by the RBI Governor that inflation is mainly due to oil price and that orderly conditions will be maintained in the money markets helped the premia recover, said a treasury official with a public sector bank. “Dr Reddy’s speech is an indirect indication to the money markets that the RBI will not permit any undue volatility,” he said.

— Our Bureau

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