A nationwide strike today by bank employees pushed the volumes down in the forex market. The rupee was traded in a tight range of 48.25-48.31 while forward premiums slipped marginally.
The Indian currency opened at 48.25/26. It touched the day's low of 48.30/3050 due to importers' demand. The currency, however, strengthened later to close at 48.26/27 as the demand for the greenbacks receded.
A dealer with a private sector bank said, "The trading volume was very thin as most of the nationalised banks were not participating. Foreign and private sector banks were present, but struck very few deals." The spot closed at 42.94 against the euro as there were very few rupee/euro deals as well.
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The transaction volume in the forward premium market was low too, though the rates dipped a bit because of the absence of market participants.
The six-month annualised premium today ended at 6.24 per cent against yesterday's closing level of 6.27 per. The one-year premium closed at 5.96 per cent compared with yesterday's closing of 5.99 per cent.
A senior dealer with a private sector bank said, "Even though the government papers yields rose a bit, we expect that the yields will go down tomorrow and in the coming week. This has pushed down premiums."
The rupee is expected to remain in the 48.20-48.30 range against the dollar in the coming week. Dealers are expecting the Indian currency to be traded in the 42.90-42.95 band against the euro. In the forward premiums market, the rates are likely to move southward as the yields of government papers are likely to fall and call rates are likely to retain soft bias.
Dealers said that six-month annualised premiums are likely to be in the 6.20-6.25 per cent band during the week while the one-year premium is expected to be in the 5.90-6 per cent band.