Rupee Seen At 47, Premiums Ranged

The coming week should see the rupee in the range of 46.98 to 47.10 with some month-end demand expected towards the end of the week. Premiums are expected to remain rangebound, unless the much anticipated rate cut comes through.

"The rupee has been rangebound in the previous week. This particular week is also expected to continue in the same vein. While keeping a broad range, the rupee will hug the 47 mark as on Friday, this level met the maximum resistance," said a dealer with a foreign bank.

On Friday, the demand was marginal, unlike the other days of the previous week and the supplies were good, allowing the spot rupee to marginally gain and close the day at 46.9950/47.

The supply of Friday was primarily from exporters who sold after the rupee gained to touch 46.9850. "The 47 level met a lot of resistance and traded in this range for nearly the entire day," said a foreign exchange dealer.

The RBI's reference rate for the dollar was 47 on Friday. "The rupee should settle into this range at these levels of 47/47.02 now as it appears that the central bank is comfortable with the rupee at this level," said a dealer with a new private sector bank.

The premiums are expected to be rangebound and not change all that much in this coming week, unless the much anticipated rate cut comes through. The six-month annualised should keep a broad range of 4.95 per cent to 5.05 per cent.

"Unless the rate cut comes through, the premiums will not come off in this week. Also if the spot rupee starts falling rapidly, approaching its all time low of 47.10, the premiums might start rising," said a dealer with a private sector bank.

"With an Federal Open Market Committee (FOMC) meeting coming up, and indications that the rupee might face some pressure, the premiums are watching the spot rupee closely," said a dealer with a foreign bank.

This week the premiums should remain flattish, with payments from importers expected.

The six-month annualised closed the day at 4.92 per cent against 4.80 per cent on Wednesday, while the one year annualised closed the day at 4.92 per cent against 4.85 per cent on Wednesday.