RBI intervenes to stem surging forwards premiums : vimarsana

RBI intervenes to stem surging forwards premiums


RBI intervenes to stem surging forwards premiums
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Synopsis
The central bank is said to have intervened through some state-run banks that brought down the cost of covering currency exposure across maturities, traders said.
Agencies
The premium on one-day forwards contract, known as Cash Tom in market parlance, settled at 7.41% Tuesday, compared with 28.95% earlier in the morning trade
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MUMBAI: The Reserve Bank of India (RBI) Tuesday had to fire-fight in the currency markets with forward premium soaring up to 28.95% in short-term onshore contracts, indicating that varying estimates of fund flows could cause wild swings in the local currency.

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