Spot Rupee Winds Up Lower, Forwards Drop Too

The spot rupee closed the day at 47.01, beyond the 47 mark due to the spot rupee remaining biddish. The forward premiums also ended the day lower.

The rupee opened higher at 46.9650 due to initial demand in the morning. On account of demand from nationalised banks, the rupee fell to an intra-day low of 47.0250. It ended the day at 47.01, lower from its Friday's close of 46.9750.

"The rupee was biddish throughout the day and due to this, ended the day lower. The volumes remained thin despite the rupee falling to 47.0250/47.03, its intra-day low," said a dealer with a new private sector bank.

 

The demand was primarily from nationalised banks, believed to have bought for one particular corporate for remittances. Supply remained intermittent but was enough to match the demand. "The supply was mostly from exporters who were booking profits," said a foreign exchange dealer.

The Reserve Bank of India (RBI)'s reference rate for the dollar is 46.99 as against 47.01 from Friday. Tomorrow, the spot rupee should keep a range of 47 to 47.05 continuing to keep its narrow range.

The forward premiums closed lower still, falling by another 2 paise, inching closing to 4.50 per cent to the 4.60 per cent level. The 6-month(annualised) closed the day at 4.78 per cent as against 4.80 per cent on Friday, while the one-year (annualised) closed the day at 4.84 per cent as against 4.86 per cent on Friday.

"Rate cut expectations are pushing the premiums lower with no indication coming forth from the central bank on whether the rate is going to happen any time soon," said a dealer with a foreign bank.

"Inter bank play is pushing the premiums lower. This trend is likely to continue for another few days. Especially with the anticipation for a rate cut so high now," said a dealer with a private sector bank.

Tomorrow, the premiums should continue its softer bias. The 6-month (annualised) should keep a range of 4.70 per cent to 4.75 per cent while the one-year (annualised) should keep a range of 4.82 per cent to 4.86 per cent.