Spot Up A Touch, Forwards Inert

The spot rupee closed the day marginally up from Friday's close at 46.9750 as against 46.9950 due to meagre demand. The premiums too remained inactive with the near terms coming off marginally.

The demand remained very little through the day with fewer supplies keeping the spot rupee in a narrow range. "The day was extremely stagnant with no big purchases and very few supplies," said a dealer with a new private sector bank.

"The rupee traded primarily in the range of 46.9850 to 47 with most deals being done in the range of 46.9850 to 46.9975," he added. The supply is expected to continue to remain less for the earlier part of this week with some month-end demand likely to come in towards the end of the week.

"The supply is believed to have come from exporters but was still very little. The spot rupee is expected to keep a range of 46.95 to 47 tomorrow, with the spot rupee likely to touch 46.90 by the end of this week, unless the RBI not wanting the rupee to appreciate so much," said a foreign exchange dealer.

The RBI's reference rate was 46.99 as against 47 on Friday. Tomorrow, the spot rupee should keep a narrow range of 46.98 to 47, with a bias on the lower side.

The forward premiums were stagnant throughout the day with the near-terms marginally lower in absolute terms by the end of the day. The 6-month (annualised) closed the day at 5.02 per cent while the one-year (annualised) closed the day at 5.01 per cent, in a nearly flattish curve.

"With no indication as to whether there will be a rate cut or not, the forward premiums are not going in any direction. This is liable to continue till the end of the week," said a dealer with a foreign 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.

Tomorrow, the premiums should continue along the same vein remaining above the 5 per cent mark. "The 6-month (annualised) should keep a broad range of 4.95 per cent to 5 per cent with no fresh factors expected to drive the premiums in any direction," said a dealer with a private sector bank.