The spot rupee strengthened to close at the 47.98/99 level on Tuesday as against Monday's closing of 48.02/03. Forward premiums remained little changed even as the call rates reached the double-digit mark.
The spot rupee opened in the range of 48.04/05 in the morning. The Indian currency, however, strengthened during the day to close below the 48 mark.
A dealer with a private bank said: "Trading was very dull. There was no pressure from the importers, while some exporters are reported to bring back their export proceeds. This caused the rupee to strengthen and close below the 48 mark."
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Another dealer said: "The high call rates made the carrying cost of dollar higher and it prompted selling of dollars by the nationalised banks. This also contributed to the rise of rupee against the greenback."
The forward premiums remained almost unchanged. The 6-month premium closed at 6.52 per cent as against yesterday's closing of 6.50 per cent and the one-year premium closed at 6.18 per cent as against Friday's closing of 6.15 per cent. A dealer said: "The premiums were up marginally on account of high call money rate. But as the premiums are already very high, and there is little movement in the spot rupee, it remained almost unchanged as compared with Monday's levels."
The rupee is likely to remain stable and be traded in the range of 47.95 to 48.05 tomorrow with supplies coming from the exporters and little pressure from the importers. A dealer with a private sector bank said, "there has been no demand from the importers nowadays, and export proceeds are likely to come in as well. This should keep the rupee around the 48-mark."
Forward premiums are likely to remain firm. Dealers expect the 6-month premium to be traded in a range of 6.45 per cent to 6.55 per cent, while the one-year premium should be in the 6.10 per cent to 6.20 per cent range. A forex dealer said, "the tightness in the call money rates is likely to continue till Friday and this will keep the premiums firm."