Spot Staid, Rising Call Pulls Premiums Up

Spot rupee closed at 47.98-99 against yesterday's closing of 47.98-9805 amid low trade volume. Forward premiums went up marginally on the back of higher call rates.

The spot rupee opened in the 47.99-48.00 range in the morning, and weakened marginally to touch an intra-day low of 48.005. The Indian currency, however, strengthened later on to close around 47.98-99.

A dealer with a private bank said, "Trading was dull and range-bound in the forex market. There was neither demand pressure from importer's side, nor was there any major supplies coming in. This kept the Indian currency range-bound." Dealers said that public sector banks today were the main buyers, while the foreign and private sector banks were the main suppliers of the greenbacks.

Forward premiums went up marginally as call rates touched 12 per cent. The 6-month premium closed at 6.05 per cent as against yesterday's closing of six per cent and the one-year premium closed at 5.80 per -- the same level as it closed yesterday. A dealer said: "Forward premiums generally track the call rates and as it went high today, forward premiums rose as well." Dealers, however, said that there were few deals executed in forward trading.

Rupee is likely to remain stable and will be traded around 47.95-48.05 tomorrow with trading remaining dull. A dealer with a private sector bank, "There has been no movement of the rupee against dollar over a month now and we do not see any reason why it should be volatile tomorrow."

Forward premiums are likely to remain around today's level as call rates are likely to remain high. Dealers are expecting the 6-month premium to be traded in a range of 5.95-6.05 per cent during the week, while the one-year premium should be around 5.75-5.85 per cent.