Spot Declines, Forwards Ease

The spot rupee closed marginally weaker in the range of 48.01/02 against dollar on Thursday as against Wednesday's close of 48.00/0025 on the wake of importers demand. Forward premiums eased by 10-15 basis points tracking a softer call money rates which remained in a band of eight per cent to nine per cent today.

The spot rupee opened in the range of 48.025/035 in the morning, and strengthened to touch an intra-day high of 48.00/01. The Indian currency, however, weakened later on to close in the range of 48.01/48.02.

A dealer with a private bank said: "Trading was extremely dull in the forex market. There was no buying pressure in the morning and the rupee was strengthening. However, there was some pressure from the importers' side in the afternoon which weakened the Indian unit."

Another dealer said: "Public sector banks also forced the rupee to weaken as it touched the 48 mark. It seems that the state-run banks are protecting the exporter's interest."

The forward premiums softened today following the call money rates. The 6-month premium closed 6.16 per cent as compared to yesterday's closing of 6.32 per cent and the one-year premium closed at 5.85 per cent as against yesterday's closing of 5.95 per cent. A dealer said: "Spot rupee continued to be steady against the dollar, and the overnight rates softened. Both these factors helped the premiums to soften."

The rupee is likely to remain stable and be traded in the range of 47.95 to 48.05 tomorrow amidst low trading volume. A dealer with a private sector bank, "there is no pressure from the either side -- supply or demand. In a situation like this, the Indian currency should move in a narrow range around the 48 mark."

Forward premiums are likely go down even more tomorrow as the call money rates are expected to remain soft tomorrow. Dealers are expecting the 6-month premium to come to be traded in a range of 6.10 per cent to 6.15 per cent, while the one-year premium should be in a range of 5.78 per cent to 5.83 per cent tomorrow.