The spot rupee fell by 4 paise today to close at 48.68/69 today due to huge corporate demand. Forward premiums continued to remain stable in the absence of much movement in government paper yield.
The rupee opened at the 48.63/64 levels today and fell sharply to touch the day's low of 48.71/72. It, however, strengthened in the closing hours to close at 48.68/69.
A dealer with a foreign bank said, "There was much corporate demand today. But in addition to that some of the public sector banks were seen buying dollars heavily, most probably on apex bank's prompting. These banks were seen offloading the greenbacks in the afternoon as the rupee crossed the 48.70 mark."
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In the forward premiums market, rates actually moved up a bit due to the spot's volatility. The 6-month annualised premium closed at 6.62 per cent compared with yesterday's close of 6.60 per cent. The one-year premium ended the day at 5.33 per cent compared with previous close of 6.30 per cent.
The Indian currency is likely to hover around 48.55-48.70 tomorrow. Dealers are expecting despite the pressure on the currency, the central bank will stem any sharp fall.
Forward premiums are expected to remain range-bound. A dealer with a new private sector bank said, "It all depends upon how the spot rupee behaves tomorrow and how the government paper yields move during the day. In the spot market much depends on what the comfort level for the RBI is, and in the government security market it all depends upon whether the central bank announces any auction." Forex dealers said that the six-month annualised premium is likely to remain in the 5.55-5.65 per cent range while the one-year premium should hover around 5.27-5.33 per cent.