Spot In A Groove, Forwards Look Up

The spot rupee ended at 47.1175-47.1225 today after keeping a 1.5-paise range, while forward premiums ended a shade higher.

The spot rupee opened at 47.11-47.12 and kept a narrow range throughout the day due to marginal buying.

"The spot rupee opened at 47.11 levels and kept a tight range due to few purchases. The rupee kept this range due to lack of activity in the market," said a dealer with a new private sector bank.

The demand was essentially from state-run banks which were purchasing in the morning and in the last hours of trading, but otherwise the market continued to remain dull. "The spot rupee continued to remain lacklustre with little supplies, complementing the demand," said a foreign exchange dealer.

The Reserve Bank of India's reference rate for the dollar was 47.11 as against 47.12 on Monday. Tomorrow the spot rupee should keep a range of 47.10-47.13 as the lack of interest should continue even tomorrow.

Forward premiums ended higher today after the announcement of another auction of a state loan. The two-year auction announcement yesterday for Rs 6,400 crore resulted in the premiums rising today.

The six-month annualised premium ended at 4.75 per cent against 4.70 per cent on Monday, while the one-year annualised premium finished the day at 4.83 per cent (4.75 per cent).

"The forward premiums saw some receiving today but interest continues to remain less so premiums kept a narrow range. The auction announcement on today and yesterday pushed the premiums to close higher," said a dealer with a private sector bank.

"The six-month annualised as well as the 12-month annualised premiums ended higher by around five-seven basis points higher. Tomorrow the premiums should keep a similar range as the sentiment in the market is likely to remain unchanged," said a foreign exchange dealer.

"Forward premiums should stick around 4.70-4.85 per cent tomorrow on the medium and long-term. The near-terms should continue to track the rupee and the overnight call rates," he added.