Re stages strong rally against $

MUMBAI, January 27: The rupee rallied by nearly 30 paise to 38.40 per dollar following good supply at the inter-bank foreign exchange market...

MUMBAI, January 27: The rupee rallied by nearly 30 paise to 38.40 per dollar following good supply at the inter-bank foreign exchange market here on Tuesday. The forward premium on the dollar also declined as the RBI intervened to bring down the soaring forward rates.

The Indian currency opened on a firm note at 38.60/65 per dollar compared to Friday’s close of 38.70/72, rallied further to trade between 38.40 and 38.50 level for the most part of the day and finally appreciated further to settle down at 38.40/42.

According to leading forex dealers, the rupee with an initial firmness was reported trading in two-ways with buying as well as selling pressure.

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Meanwhile, the forward premium which initially came under pressure due to import covering, dipped lower as soon as the RBI intervened in the market with the sixth month annualised premium quoted at 19.29 per cent, a dealer said. The RBI intervened for July and August maturities. February premiums closed at 123-128 paisa, March at 183-188 paisa, Aprilat 246-251 paisa while May dollars finished the day at 287-293 paisa.

The six-month annualised forward cover went at 19.22 per cent. “Foreign and some state-run banks are selling spot and buying forward to cover their FCNR-B liabilities," said dealers.