Weekly Forex Market Report : Sep 04th - Sep 08th
The week saw rupee gaining continuously except on the last day, i.e. Friday. The rupee, which opened the week at 45.77 closed the week at 45.63 with almost a gain of 14 paise. FIIs remained quite active in buying the scrips and had put heavily in stock markets. The market is expecting dollars to flow in from certain investment deals that have been signed between Indian and foreign companies over the last two months. There were a couple of large remittances from foreign funds amounted to $70million - American Insurance Group and Asian Equity Infrastructure Fund which had put in bids amounting to 350 crore towards their subscription to the IPO of Hughes Telecom. However, market sources feel that rupee would not appreciate beyond this level. The detailed report follows:
Friday, 8th September
The rupee ended the day at 45.6375/6425, barely changing from its previous close of 45.62/63. The market witnessed dull trades and thin volumes. The rupee opened at 45.625/635 and was quoted at 45.63/6375 in early trades. The rupee moved in a narrow two paise range though there was a demand from exporters and importers. Apart from short recovering by banks, the market witnessed little activity. Though the sentiment on rupee remained positive on expectations of large capital flows into the country, there were some concerns over rising oil prices. However, market sources felt rupee would not appreciate beyond current levels, as there were rumors that RBI would absorb all the dollars coming in through the telecom industry.
Thursday, 7th September
The rupee ended at 45.62/63 unchanged from its previous close of 45.625/635 and was traded in a firm range through out the day. The market is expecting large inflow of funds into the market in the next couple of months. Foreign funds which were net sellers in the stock markets in July turned to be buyers in August and September. On Monday alone, the net purchases stood at over $ 35 million. The market is also counting on a large inflow of $400 million, the amount paid by Singapore Telecom for equity stakes in two Bharti group companies. In the forwards segment, premia fell after RBI cut yields at its daily auctions but rose later on higher call rates. RBI cut the yield on the 1 day repo from 12% to 11% and from 13% to 12% on the 4 day repos.
Wednesday, 6th September
The rupee ended at 45.625/635, stronger by 8 paise against its previous close of 45.705/71. The forex market witnessed strong dollar inflows during the day while dollar importers remained poor. The rupee opened at 45.70/715 and was traded in a stronger range of 45.675/69 in early trades. There were a couple of large remittances from foreign funds amounted to $ 70million - American Insurance Group and Asian Equity Infrastructure Fund which had put in bids amounting to Rs.350 crore towards their subscription to the IPO of Hughes Telecom. Few public sector banks bought dollars in the market.
Tuesday, 5th September
The rupee ended at 45.705/71, over its previous close of 45.71/72. The inward remittances of dollars by corporates continued to be good. There were few corporates which brought in the proceeds of what they raised in the foreign markets few months ago. Though RBI has instructed them to bring back the funds raised abroad there was no time frame set. So it is expected that there would be input of dollars from few more corporates. FIIs continued getting dollars and were the net buyers in stock markets. The market is expecting dollars to flow in from certain investment deals that have been signed between Indian and foreign companies over the last two months.
Monday, 4th September
The rupee ended at 45.71/72, stronger by about five paise from its previous close of 45.765/77. The rupee opened at 45.75/77 and started firming up early in the day. There was inward remittance from the foreign funds. FIIs, which were net sellers in the stock markets in July, turned net buyers in August. The net purchases in August stood at $281 million. Foreign funds are still buying and the stock market has rallied. Importers had met most of their dollar requirements and the market could not see any immediate pressure on rupee.
K.Venu Babu