"Corporates have been selling dollars. There has been a lot of import cancellation by corporates in the past two days," a dealer in a European bank said. Sources said that the RBI governor Bimal Jalan met chiefs of big public sector banks early this week and advised them to keep the market stable. The RBI governor had earlier on June 11 directed corporates not to book dollars in excess of their inventory requirements.

Corporate treasurers, however, denied that they were selling under pressure from the monetary authorities. "We are selling because we are booking profits. We have booked thegreenback at a lower rate and now we are finding it attractive to sell and book profits," a corporate treasurer, who sold about $50 million today, told The Financial Express.

The prime minister on Wednesday met finance minister Yashwant Sinha and told him to bring back order to the volatile foreign exchange market. The rupee has depreciated by 7 per cent since May 11 when India conducted the first series of nuclear tests. Subsequently, the Clinton administration imposed economic sanctions, Standard & Poor's changed the India outlook to negative and Moody's downgraded India to the speculative grade.

So far, only public sector corporates have been selling dollars to the State Bank of India and the Bank of Baroda, which, in turn, have been selling dollars in the market. With private sector corporates also starting to sell their long dollars, it has become amply clear that pressure from the authorities is likely to pay off.

Simultaneously, importers, too, have been keeping away from buying dollars,dealers pointed out. "With corporates unwinding their positions and the rupee starting to appreciate, importers will come in at a later stage," a dealer in a foreign bank said.

On Thursday, however, the public sector corporates bought dollars to meet the month-end demand. "The State Bank was seen buying dollars today on behalf of its public sector clients," a dealer in a private bank said. This is a clear reversal of roles as earlier the State Bank of India was selling dollars while private sector corporates kept buying dollars to take cover.

The spot rupee was volatile today as it touched an intra-day high of 42.50 before weakening to close at 42.70/72 -- marginally weaker than its previous close of 42.68/70. The forward premiums firmed up tracking the spot rupee.

The six-month forward (annualised) shot by up by 10 paise and remained at this level for some time before another bout of receiving saw it firm up again by 4-5 paise.