Rupee Depressed On Banks Buying, Forwards Mellow

The spot rupee ended the day at 47.12/1250 after a day of good buying by nationalised banks while the premiums ended on a soft note.

The spot rupee opened the day at 47.10/11, as the yesterday close. It continued to move in a narrow range of 47.10-47.12.

"The rupee saw good support at 47.10 levels and some deals were also executed at 47.0975 levels. But as the rupee did not get support at below 47.10 levels, it ended below this level," said a dealer with a new private sector bank.

"The interest levels are still very low but today State Bank of India (SBI) and some other nationalised banks, probably at the behest of the central bank, were buying. Other than that there was practically no buying by corporates," he added.

 

There were also good inflows today. Dealers believe it was part of a private sector bank's American depository receipts (ADS) remittances flowing in.

"Since the buying interest continued to be less, the rupee kept a narrow range," said a dealer with a public sector bank.

The Reserve Bank of India's reference rate for the dollar was Rs 47.10 against Rs 47.12 on Thursday. During the coming week the spot rupee should be ranged around 47.11-47.18.

Forward premiums ended the day on a soft note with the six-month annualised premium ending at 4.75 per cent against 4.78 per cent on Thursday, while the one-year annualised ended at 4.80 per cent against 4.84 per cent on Thursday.

"Premiums opened a little low but remained range bound for the day. As the interest has waned, it has even affected the forward contracts market. Otherwise the premiums remained steady through the day'' trading session," said a foreign exchange dealer.

"With political tension and overnight call rate turning easy, the market has decided the direction of the market," said a foreign exchange dealer. The coming week should also see premiums ranged narrowly unless the rupee depreciates.