Spot Firms Up By 3 Paise, Premiums Follow

The spot rupee ended firm at 47.1075 today, three paise higher against Tuesday's close of 47.1350. Forward premiums also ended stable on the back of political stability.

The spot rupee opened at 47.1325/47.14 with bids coming in from morning. "Banks unwound their long positions after concerns about the political climate reduced," said a dealer with a new private sector bank.

The demand continued to be sparse, with regular supplies from importers matching it off. "The lack of dollar demand continues with ample supplies after banks unwound their positions. Thus, the rupee recovered before closing the day three paise stronger," said a dealer with a foreign bank.

 

Tomorrow the spot rupee may keep a range of 47.10-47.13. "The rupee should be supported at the 47.10 levels as the central bank may not want the rupee to appreciate further," he added.

Forward premiums ended a shade stronger after concerns over the government abated. The six-month annualised premium closed at 4.80 per cent (4.85 per cent), while the one-year annualised premium finished the day at 4.85 per cent (4.89 per cent).

Forward premiums also softened on the back of a stable call rate and ebbing political concerns. "The premiums ended marginally soft after confirmation over the prime minister's continuation. The premiums also came off along with the recovery in spot rupee," said a dealer with a private sector bank.

"Now that the political problem has been solved temporarily, premiums should remain easy for the next few days where the six-month annualised premium could keep a 4.75-4.90 per cent band," said a foreign exchange dealer.

Overnight call rates closed at 6.70-6.85 per cent amid comfortable supplies in the money market. "The premiums should continue to remain soft even tomorrow where the six-month premium could keep a range of 4.75-4.82 per cent," he added.