Demand Dearth Pips Spot, Premiums Southbound

The spot rupee ended 2 paise lower at 47.1525 against its Wednesday close of 47.1375 on the back of corporate buying while premiums ended lower due to liquidity concerns.

The spot rupee opened the day at 47.1450/1550, about a paise lower from Wednesday's close. It moved in a range of 47.1450-14.16 through the day and ended at 47.1525.

"The spot rupee continued in the same narrow range throughout the day," said a dealer with a new private sector bank.

The demand remained meagre through the day with supplies matching the demand. "By the end of the trading session, the demand squared off the supplies, as has been the case in last few days," he added.

"The fall in the last few days has been very gradual and reflects the lack of buying interest. With some month-end demand expected to start streaming in from tomorrow, the rupee is likely to come under pressure tomorrow and will continue in the same vein till August end," said a foreign exchange dealer.

Tomorrow the spot rupee should remain in the 47.14-47.18 range. Forward premiums ended marginally up from yesterday close after a day of dull trading.

The 6-month annualised premium ended the day at 4.73 per cent as against 4.77 per cent earlier while the one-year annualised ended the day at 4.75 per cent, unchanged from Wednesday.

"Call rate remained tight through the day, ending at around 10 per cent. This increased the pressure on premiums but due to the lack of interest in the market, only the near-terms got affected," said a dealer with a new private sector bank.

"After tracking call, premiums ended higher than yesterday's close on liquidity concern. This situation is likely to spill over in tomorrow's trade as well. Premiums should continue to remain flat or end a little softer," said a dealer with a foreign bank.

Tomorrow premiums should remain soft and stick to the 4.70-4.80 per cent band.