Financial Daily from THE HINDU group of publications
Friday, Mar 21, 2003
Financial Daily from THE HINDU group of publications Friday, Mar 21, 2003 |
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Money & Banking
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Forex Re recovers after 12 paise fall Our Bureau
Mumbai: THE rupee nosedived on Thursday losing 12 paise from opening levels against the dollar due to panic demand by corporates and banks. This follows the start of the war with the US missiles targeting Baghdad. The rupee opened at 47.72, which was the intra-day high and the intra-day low was at 47.84. However, the domestic currency recovered later in the day to close at 47.75, with dollar supplies coming and reported intervention by the central bank. According to news reports, the Reserve Bank of India — through public sector banks sold dollars to cool the dollar demand and keep the domestic currency under check. Forex dealers are also taking comfort from the fact that the RBI has assured to soothe the market if need be. "Close to $100-150 million was bought amongst both by corporates and banks,'' said a forex dealer in a public sector bank. "All sectors of corporates were in the market right from oil, engineering and manufacturing companies,'' said a forex dealer in a private-sector bank. International Brent Crude eased on Thursday by almost a dollar to $27.50 with the end of uncertainty as to when the war will commence. The forwards market was however less active except the demand for forward contracts in the early half of the trading day. The six months forwards closed at 3.77 per cent (3.74 per cent) and the one-year closed at 3.50 per cent, unchanged from Wednesday's close. Gilts rally shortlived G-sec prices rallied by 35-40 paise intra-day, but later lost 10-20 paise. With the uncertainty of war out of the way, players were ready to take fresh exposures in the debt market. The ten-year benchmark, 9.81 per cent 2013 paper opened at Rs 124.65 and closed at Rs 124.85 with an yield of 6.44 per cent. Traded value was capped at Rs 1,700 crore with value buying coming in from players across the board. Liquidity in the market was tight with the inter-bank call money rates closing at 6.10-6.25 per cent following the advanced tax outflow and the State loan sale that sucked out considerable liquidity from the system. Through the LAF window, the central bank received 2 bids worth Rs 3,680 crore out of which bids worth Rs 1,840 crore were accepted at the repo rate of 5.00 per cent.
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