The spot rupee was traded in a thin range of 47.1225-47.14 against dollar today against Friday's 47.1150-47.1250 range. The volume of trading, however, continued to remain low. Forward premiums came down heavily by 5-10 basis points on the back of comfortable liquidity and soft call.
The spot rupee opened the day around 47.1250-47.13 in the morning. But it weakened a bit during the day on the back of importer's demand to close around 47.1350-47.14.
"The forex market continued to be dull today. Only in the late hours there was some movement due to demand from the importers," said a dealer with a new private sector bank. Dealers said that most of the demands were from the public sector banks.
Forward premiums slipped heavily today following the dip in call rates. The 6-month premium went down by nine basis points to 4.66 per cent compared to 4.75 per cent on Thursday and one-year premium closed at 4.75 per cent -- five basis points down form 4.80 per cent on Friday. "Call rates were low today and is expected to remain so during the rest of the week. This made forward premiums stumble across the maturity."
Spot rupee is likely to remain rangebound around 47.11-47.14 tomorrow. A dealer said, "We are not expecting the rupee to depreciate or appreciate in a major way in the near future as no real threat or boost are being foreseen." He said that the rupee could actually appreciate but for the dollar demand from some of the nationalised bank.
Dealers are also expecting forward premiums to dip further. The treasury head of a private sector bank said, "Call rates are likely to remain soft and stable around the current level and, hence, forward premiums are likely to dip more." Dealers are expecting the six-month premium to touch the 4.60 per cent level soon.
