Governor & #39;S Speak Props Spot, Premiums Slip

The spot rupee was traded in a tight band of 48.11-48.17 against the dollar today as the Reserve Bank of India (RBI) governor's statement made yesterday lent comfort to the market. Forward premiums remained almost unchanged with stable forex and call money market.

The spot rupee opened around 48.16/17 in the morning, but gradually strengthened during the day to close at 48.11/12 against yesterday close of 48.12/14. Dealers said that there was not much activity in the market.

A dealer with a private bank said, "There was no panic in the market. The statement by the RBI governor bolstered the sentiment quite a bit." Dealers said that there was neither importer pressure nor any inter-bank activity in the forex market.

 

A dealer with a foreign bank said, "The Indian currency moved in tandem with other Asian currencies."

Forward premiums ended the day almost unchanged. A dealer with a nationalised bank said, "There was some paying pressure in the morning, but it was not enough to affect the rates much and as the pressure died down gradually during the day, premiums as a matter of fact closed lower."

The 6-month premium closed at 6.28 per cent against yesterday's closing of 6.30 per cent while the one-year premium went down marginally to 6.23 per cent against yesterday's closing of 6.25 per cent.

Rupee is likely to remain stable and may move in the 48.10-48.16 band tomorrow.

Said a dealer with a nationalised bank, "The rupee is expected to trade in the same range for the rest part of the week though there will be some concern over the international political scenario."

Forward premiums are likely soften a bit as call rates are likely to remain low around the benchmark bank rate. Dealers are expecting the 6-month premium to come below 6.25 per cent and the one-year premium may close around 6.20 per cent tomorrow. A forex dealer said, "There is no liquidity pressure in the market. Yesterday's rise in premiums was just a panic reaction and as there is no such concern in the market now, we expect the rate to fall a bit."