At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed strong at 50.27/28 in line with early rise in stocks but turned negative at midsession and logged a low of 50.43 in line with drop in local equities. However, fag-end dollar selling by exporters and some banks aided the to rupee to bounce back to settle at 50.18/19 as against yesterday`s close of 50.38/39, showing a rise of 0.39 per cent. Yesterday, it was tumbled by 0.47 paise or 0.94 per cent after the apex bank kept the key interest rates unchanged in its mid-quarter monetary policy review.
FIIs pumped in USD 36.42 million on Thursday, taking a total to over USD 1.4 billion in the current month till March 15 and over USD 8.6 billion in 2012 so far as per Sebi data. "The rupee closed grossly strong. The rupee showed a upward correction mainly on account of profit booking in dollar today after swiftly depreciating to 50.48 levels yesterday. However, the depreciation trend remains intact in the rupee targeting 51 levels in the near term. The local bourses plunged after a disappointing budget today," Mr. Abhishek Goenka, CEO, India Forex Advisors said.
The dollar index, consisting of six ajor currencies, was up by a mere 0.06 per cent while New York crude oil was trading nearly USD 105.5 a barrel in European market today. Mr. Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said,"The INR made a stronger opening tracking the overnight weakness in the dollar index, which retreated from its high of 80.74 to 80.20 levels. The Union budget passed away without making much of noise as if has been a non event.
The budget stressed more on the modes and the avenues for capital acquisitions and raising the revenues through increase in Excise duty and the Service Tax so that the fiscal deficit can be brought under acceptable levels. The subsidy for oil and fertilizer sector has also been raised and the ministry showed its concern over the rising global crude oil prices."
"Except for some sharp and very choppy moves in INR and all other pairs for some time as soon as the budget finished there was any moves left for the pairs. They trade tad with price mostly drifting lower. The rupee shall hold on its weakness as we have oil importers demand for dollars and other year end payments have been weighing on the rupee," he added.
The rupee premium for the forward dollar recovered slightly on stray paying presure from banks and corporates. The benchmark six-month forward dollar premium payable in August ended a bit higher at 170-1/2-172-1/2 paise from overnight close of 170-172 paise and far-forward contracts maturing in February also finished higher at 301-303 paise from 298-300 paise.
The RBI has fixed the reference rate for the US dollar at 50.3130 and for euro at 65.8262. The rupee ended slightly better at Rs 78.96/98 against the pound sterling from Rs 78.98/79.00 yesterday and also rebounded against the euro to Rs 65.59/61 from Rs 65.83/85. It, too, bounced back against the Japanese yen to Rs 59.84/86 per 100 yen from last close of Rs 60.49/51.