The rupee gained overwhelmingly by above 15 paise against the dollar by closing at 46.99/47.00, even as the state run banks lent support to the falling dollar. This is against the previous close of 47.1450/1500. Opening the day at 47.10/11, the rupee weakened to touch 47.1050/1100. But started gaining later consistently, before the state-owned banks through their weight around the dollar for a brief while, but the rupee gains continued after that taking the rupee to the 24-month high of 47.99/47.00 at close. The comment of the US Treasury secretary that he will abandon the 8-year old American strategy for strong US dollar against most of the currencies, has led to the free fall of dollar, a foreign bank dealer said. In the forwards market, there was a sharp fall seen again in the premiums across all maturities. Meanwhile, the RBI fixed its reference rate for dollar at 47.06 against the previous rate of 47.14.
FORECAST: The rupee seen gaining on Tuesday.
Forward premiums fell across all maturities to the record lows, on the back of spiralling rupee in the spot market. Both the six- and 12-month annualised premia dipped to 0.71 per cent (1.00 per cent) and 0.77 per cent (1.20 per cent) respectively. The forwards opened a little lower than the previous close, and continued the southward sojourn backed by the general negative sentiment against the dollar, a foreign bank dealer said. Fall in inflation also helped this trend, a private bank dealer said. The WPI eased to 6.03 per cent by May 3 from a two-year high of 6.47 per cent on April 12. The premium for May 2003 closed at the previous level of 1.00/25 paise. The benchmark six-month dollar premium, payable at end-October, closed at 18/19 (21.50/22.50 paise). In month-wise premia in the far forwards, the March 2004 dollar and April dollar closed at 24/25 and 31/32 (41/42 paise and 49/50 paise) respectively.
FORECAST: Premiums seen falling on Tuesday.
The government securities prices gained by 30-45 paise, higher in the longer end maturities, compared to previous closes. Opening at higher then Saturdays closing levels, the G-Secs continued their northward journey to close at higher levels. Positive developments in the forex spot market were the main boosters for the sentiment in the market, a dealer said. There is a strong case for effecting a repo rate cut. But the RBI may wait till the US Fed to do that first, so that it would not affect trade balance, a foreign banker said. Meanwhile, RBI fixed a mark-up of 14 basis points for 11-year floating rate bond for the first year. The benchmark 10-year 9.81% paper closed at 129.60. The 11.40% 2008 shorter maturity paper closed at 127. The 8.07% 2017 bond closed at 118.40. The 8.35% 2022 paper closed at 123. On the NSEs WDM volumes of Rs 7,882 crore were seen.
FORECAST: Prices seen steady on Tuesday.
(Compiled by BSS Reddy)