Weekly Forex Market Report : Sep 25th - Sep 29th
The rupee saw an appreciation in the week. It opened at 46.14/17 and ended at 46.02/04, with almost a gain of over 12 paise. The pressure on the rupee was relaxed with global oil prices going down. Crude oil prices have fallen by 15.6% in the week. Another factor favored was the US announcement that it would give oil from its reserve. There were concerns on the rupee with the statement of Moody's that the rating agency is less optimistic about India on the country's fiscal and external imbalances. However, the positive outlook for India which was upgraded from stable a year ago remained unchanged. The other favorable factor to rupee was that RBI governor stated that the central bank was reviewing the export earners foreign currency (EEFC) account and a final decision was expected in the next few days, which would bring about $1 bn into the country. The detailed report follows:
Friday, 29th September
The rupee ended with smart gains on renewed exporter dollar sales and unwinding of long positions by banks buoyed by improved sentiment. Boosted by overnight news that the central bank plans to review the EEFC accounts, the rupee opened on a firm footing and in a range of Rs.45.98/46.03. The rupee closed at Rs.46.02/04 higher from previous close of 46.10/11. Many factors like a sharp fall in global oil prices, a statement by RBI and limited month end dollar demand sparked off a sharp rally in the rupee. Global oil prices fell sharply after Saudi Arabia said that it was not comfortable with oil prices ruling above $30 a barrel and that it would pump in adequate surpluses to bring down prices.
Thursday, 28th September
The rupee ended at 46.07/10, unchanged from its previous close of 46.09/10. The rupee opened at a weaker note at 46.11/14 and was quoted at 46.12/14 in early trades. It went to an intra day low of 46.17/18 but recovered soon after a statement by RBI governor that the central bank was reviewing the export earners foreign currency (EEFC) account and a final decision was expected in the next few days. Doing away with EEFC accounts would bring about $1 bn into the country. Global oil prices also came down on Thursday following a statement by Saudi Arabian government on the oil prices and got settled at $28.98, a barrel.
Wednesday, 27th September
The rupee closed at 46.09/10, down by almost 4 paise from its previous close of 46.05/06. The month end demand for rupee drove it downward. The rupee opened the day at 46.08/11 and was quoted at 46.09/12 in the early trades. There were concerns on the rupee with the statement of Moody's that the rating agency is less optimistic about India than it was a year ago and concerns about the country's fiscal and external imbalances remain. However, the positive outlook for India which was upgraded from stable a year ago remain unchanged. There were heavy dollar purchases by the foreign banks on behalf of FIIs who have been heavy sellers in the equity markets. In the forwards segment, premiums closed higher on account of some amount of paying interest.
Tuesday, 26th September
The rupee ended at 46.05/06 to the
dollar, down by about four paise from its previous close of 46.01/03. Trades during the
day were rangebound with all eyes on global oil prices and the euro. The rupee opened the
day at 46.01/03, unchanged from its previous close and was quoted in a narrow range in
early trades. However, by afternoon importers bought dollars in as the oil prices were
steady. Though the US announced that it would give oil from its reserve, analysts
predicted that the US would face shortage of heating oil this winter, which will see
global oil prices further increase. In the forwards segment of the market, premiums ended
lower. The one-month premium ended the day at 4.69 per cent against its previous close of
5.03 per cent while the three-month premium ended at 4.93 per cent . The six-month premium
ended the day at 4.90 per cent.
Monday, 25th September
The rupee ended stronger at 46.01/03, up by almost 18 paise from its previous close of 46.18/21 last Friday. The importer demand reduced after global oil prices began coming down. The rupee opened at 46.14/17 and immediately started appreciating on news that oil prices had appreciated from its highs. Crude oil prices have fallen by 15.6% since last Wednesday. However oil prices are still up by 23%. Crude prices were quoted at $32.65 per barrel down by 1.35% from opening levels. The US declared that it would be releasing 31 mn tonnes of oil from its petroleum reserves of 571 mn tonnes.
K.Venu Babu