Rupee Seen Rangebound, Forwards May Slip

The spot rupee may maintain a narrow range of 47.10 to 47.17 this week, while forward premiums are likely to be soft on the back of easy call rates.

"The spot rupee, opening at around 47.11/12 on Monday, may remain biddish throughout the week," said a dealer with a new private sector bank.

On Friday the spot rupee ended at 47.1250, marginally lower from its Thursday's close, on the back of thin volumes.

"The currency is expected to continue along in the same vein this week," said a foreign exchange dealer.

Throughout Friday the rupee kept a narrow range of 47.11-47.1250. "The demand-supply match kept the rupee tightly range-bound," he added. The Reserve Bank of India's (RBI) reference rate for the dollar on Friday was Rs 47.12.

"On Monday the spot rupee should open at around 47.12/13 and should keep a 47.10-47.17 range for the week. Most nationalised banks are expected to deal around 47.10, which is seen as a support level," said a dealer with a foreign bank.

Forward premiums may remain soft this week and may come off further by Friday. The six-month annualised premium is likely to keep a 4.60-4.75 per cent range.

"The premiums are expected to slip more this week as the overnight call rates may remain weak. The liquidity condition is also easy which could keep premiums stable," said a foreign exchange dealer with a private sector bank.

On Friday the six-month annualised premium ended at 4.75 per cent, while the one-year annualised premium was at 4..70 per cent. The one-year annualised premium is seen in a 4.60-4.80 per cent range this week.

Importers are asked to cover their near-term positions, while exporters are advised to wait till the rupee touches the 47.15-47.18 level.