Karthik007’s Blog

In fairly active trade at the Interbank Foreign Exchange (Forex) market, the local unit opened sharply higher at 49.18/20 a dollar from the previous close of 49.58/59.

Initially, it touched the day’s low of 49.35 on some dollar buying by oil refiners.

But a spurt in the Sensex after the government unveiled a multi-crore stimulus package for the economy and dollar selling by banks on expectations of a further fall in the greenback helped the rupee to rally smartly, a forex dealer said.

Some stability in most of the Asian stock markets after the announcement of the stimulus packages by many developed as well as developing countries might have brought some relief in the market.

As a result, the Sensex flared up by another 492 points, or 5.37 per cent, while Asian indices ended the day with a gain between 2.0 per cent and 5.6 per cent.

Foreign funds were also buyers in the past few days and looking at the stability in the share markets, they expected to invest more at the current lower levels in the coming days, which also boosted the rupee sentiment.

The rupee breached the 49 level and touched a high of 48.89 before concluding the day at 48.98/49.00, a rise of 1.21 per cent.

Meanwhile, the RBI fixed the reference rate for the dollar at Rs 49.12 and for the single European currency at Rs 63.52.

The rupee premiums on the forward dollar improved further on sustained paying pressure from banks and corporates.

The benchmark six-month forward dollar premium payable in May ended at 79-82 paise, higher from 71-74 paise on Monday and the far-forwards maturing in November also finished up at 111-114 paise from 100-103 paise, previously.

In cross-currency trade, the rupee recovered sharply against the pound sterling and the euro and remained firm against the Japanese yen.

The domestic currency surged against the pound sterling to end the day at Rs 72.44/46 from the previous close of Rs 73.92/94 and also recouped against the single European currency to Rs 63.34/36 per euro from the last close of Rs 63.84/86 per euro.

The rupee, however, improved further against the Japanese yen to                Rs 52.78/80 per 100 yen from Monday’s close of Rs 53.11/13 per 100 yen.