Spot Re Tight, Premiums Shed 3-4 Paise

FOREX REPORT

The spot rupee stayed steady yesterday moving in a narrow range of 1 paisa. Forward premiums, on the other hand, saw a bit of action, dipping 3-4 paise aggregate.

The spot rupee hardly saw any movement yesterday of just within a paisa. "There is a lot of supply in the market causing absolutely no movement to speak of," said a dealer with a private bank.

The spot rupee opened at 43.6350 - 43.6400, higher than Friday's opening, but by the afternoon, there was a lot of buying by importers, pushing the rupee up to close at 43.6450 - 43.6500.

 

"The spot was quiet as usual, moving within the range of 43.6350 -43.6450/75," said a dealer with a foreign bank.

The RBI reference rate for the dollar was 43.6400 yesterday as against 43.6400 on May 5.

The rupee is expected to remain stable today, not moving away from its current groove of 43.6400 - 43.6500.

"The spot rupee will be cordoned off in the present range of 43.6600," said a dealer with a foreign bank. "Unless there are some inflows tomorrow, the rupee will continue at the same levels," affirmed a dealer with a private sector bank.

The forwards saw some action yesterday with they dipping an overall 3-4 paise. "There was a slight downward drift during the day," said a dealer with a private sector bank.

"The forward premiums depend on the call rates, which have been steady the last few days, ensuring that the forwards do not fluctuate much," he added.

The 6 month annualised premium is likely to be in the range of 2.40 - 2.50 per cent, which is a decline of 3-4 paise from its last close. On an aggregate basis there was a 5-6 paise slip in the far termed forwards and a 2-3 paise drop in the near term forwards.