Spot, Forwards End Higher In Thin Trade

Spot rupee ended marginally firmer at 47.12 per dollar on Monday, compared with Friday's close of 47.1250, due to sparse activity. Forward premiums, too, wound up higher amid biddish undercurrents.

Spot rupee kept a narrow range of 1.5 to 2 paise and saw very little trading activity through the day. The spot rupee opened the day at 47.13, traded in the range of 47.11 to 4,713 and ended the day at 47.12.

"There was very little movement throughout the day with marginal demand being satisfied with the supplies that came in the later half of the day," said a dealer with a new private sector bank. "There was demand from all the banks but not too much in quantity, which matched the supplies," he said.

 

"There weren't too many remittances today, due to which the demand continued to remain less. It is continuing its stable vein. Some month-end demand should enter the market soon, and till then the spot rupee should stay stable," added a dealer with a foreign bank.

The Reserve Bank of India (RBI)'s reference rate for the dollar today was 47.13 as against 47.12 on Friday. Tomorrow, the spot rupee should keep a range of 47.10 to 47.15.

The forward premiums also closed higher. The 6-month (annualised) ended the day at 4.79 as against 4.75 per cent while the one-year (annualised) ended the day at 4.77 per cent as against 4.70 per cent from Friday.

"There was no big movement even in the premiums market. The premiums closed higher after there was some receiving by banks," said a foreign exchange dealer. "Trade volumes continued to be light as importers were not keen on hedging because of a stable outlook for the spot rupee," he added.

"Even the call money market continued to be stable with some liquidity concerns which were met by the central bank through its refinance. So the premiums did not move up too much," said a dealer with a new private sector bank.

"With the talks of an auction and the Libor coming off, dealers are anticipating a cut in the US Fed rate. This, coupled with the fact that the RBI has indicated that there will be no short-term domestic rate cut, would see that the premiums remain slightly biddish for a few more days," said a dealer with a private sector bank.