Rupee opens weaker The Rupee opened weaker today at 48.75/76 from previous close of 48.74/7450 & now trades at 48.76/77. On Friday, the Rupee closed a tad weaker on dollar buying by state run banks, which normally act on behalf of the central bank. The Rupee touched a high of 48.6950 on Friday as foreign banks, which are usually starved for Rupee funds, sold Dollars to meet the reserve requirements on reporting Friday. The forward market experienced heavy receiving pressure; the benchmark 6-month premia closed at 5.90% on heavy forward sale of Dollars presumably by state run banks. The Call rate hovered around 6.25-6.40%. US Employment report reassures the Dollar; jawboning keeps the Yen off its strength. The Dollar recouped some of its losses as the US employment report showed that the US economy added 66000 jobs in Feb & that the unemployment rate fell last month from 5.6% to 5.5%, its lowest since Oct 2001, belying market expectation of a deterioration. The average hourly earnings also edged up 0.1% in Feb (prev 0%), showing clear signs of the US economy recovering from its recession. The Federal Reserve is now expected to remove its easing bias at its next FOMC meeting on 19th March, though an immediate hike in the rates is not anticipated. The Euro lost its fizz and fell as low as about 87.25 cents. Sterling also fell over three-fourths of a cent to a low of 1.4194 against the cheerful dollar. Still the Dollar ended the week down. There seems to be some adjustment of positions/portfolios among investors who had bought Dollars during the world economic downturn, now that the US – led global economic rebound looks apparent. The Yen seems to be losing its strength on official jawboning, after Finmin Shiokawa said that the government would consider action if it found "manipulative moves" behind the yen's rise. Massive Japanese repatriation & the willful intention to keep the Nikkei above the 12000 mark, to reduce mark to market losses among Japanese banks before the financial year-end, blinded investors of the Q4 GDP decline in Japan.

Interbank Indian Rupee Markets Rupees per dollars Spot 1 Month 3 months 6 months 12 months Bank Sells at 48.7650 49.0598 49.5700 50.2307 51.2710 Bank Buys at 48.7550 49.0398 49.5500 50.2057 51.2482

FxForwards Percentages   1 Month 3 Months 6 Months 12 Months USD Libor 1.90 1.96 2.18 2.78 Forward Premium 7.13 6.56 5.98 5.13 Implied Deposit 9.03 8.52 8.16 7.91 Sovereign Zero Coupon 6.35 6.35 6.37 6.39 Arbitrage -2.68 -2.17 -1.80 -1.52

Source: Mecklai Financial Services

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