MARKET NEWS
Dollar-rupee forward premiums dip after India central bank's liquidity infusion - REUTERS
By Jaspreet Kalra and Nimesh Vora
MUMBAI, Jan 16 (Reuters) - Dollar-rupee forward premiums declined on Thursday after India's central bank said it would infuse rupees into the banking system daily, which bankers said would reduce the need to conduct dollar-rupee buy/sell swaps.
The Reserve Bank of India on Wednesday said it will conduct variable rate repo auctions, through which it lends funds to banks, on all working days until further notice.
WHY IT'S IMPORTANT
Forward premium levels are an important factor that companies consider when managing their forex risks. The level of the near-maturity premiums impacts the behavior of speculators when they wager on moves in the dollar/rupee pair.
