The spot rupee closed at an all-time low of 47.3450/3550 today against Friday close of 47.25/2550 on the back of foreign portfolio outflow while forward premiums went up by 5-10 basis points.
The spot rupee opened weaker around 47.25 in the morning and slipped further to touch 47.3550 on the back of outflow of foreign funds. Dealers said that there was no support from the public sector banks even though the rupee continued to decline throughout the day. They said foreign banks were the main buyers in the market. A dealer with a private sector bank said, "It was the foreign institutional investors who were withdrawing funds through foreign banks."
A dealer with a foreign bank, however, said, "Importer's demand played a part as well."
Also Read
Dealers said that most of the trades were done in the range of 47.32-47.34.
Forward premiums surged ahead along with the fall in the spot. The 6-month premium went up by 5 basis points to close at 4.75 per cent against Friday's close of 4.70 per cent while the one-year premium increased by 10 basis points to close at 4.90 per cent against 4.80 per cent on Friday. A dealer with a nationalised bank explained "Everybody is expecting the rupee to go down more which pushed up forward premiums. Moreover, market was concerned over the recent statements made by the Central government on increasing the government expenditure."
Spot rupee is likely to go down further tomorrow. Dealers are expecting the Indian currency to touch the 47.38-mark tomorrow. A dealer said, "The outflow of foreign funds is likely to continue. The apex bank sees no problem with the situation as they refrained from doing anything even the rupee fall continued."
Forward premiums are likely to go down further. Dealers are expecting the six-month premium to touch 4.80 per cent while the 12-month premium will go up to 4.95 per cent. Dealers are expecting forward premiums to touch five per cent by the weekend.