Rupee forwards rise as foreigners sell dollars to buy bonds

Reuters:  Rupee one-week forwards ended firmer on Tuesday as foreign investors sold dollars to buy local bonds, while selling of the greenback by some exporters and banks also supported sentiment.

World stocks rose for the first time in three days and sterling and the euro climbed, as investors made a rush for Brexit-bashed assets hammered by some of the biggest falls since the 2008 collapse of Lehman Brothers.  One-week dollar/rupee forwards, which have been acting as a proxy for the spot rupee, ended at 147.80/148.00 per dollar, compared with Monday’s close of 148.20/40.

“Foreigners sold dollars to buy (local) bonds. There was some selling by banks too,” said a currency dealer requesting not to be named.

Dealers said the three-day dollar/rupee forwards, which were not traded since 15 June, started trading on Monday.

The forwards, known as spot next, ended at 147.65/85 per dollar, compared with Monday’s close of 148.05/25.

Spot next, which has acted as proxy for the spot currency since January, indicates the exchange rate for the day following conventional spot settlement.

For Tuesday’s trade, the spot next settlement takes place three days ahead.