The rupee ended last week at a 32-1/2 month high of 46.33/34 per dollar on the back of strong inflows from foreign funds and exporters selling receivables.
Despite ample liquidity, yields on government securities saw a swing of just two basis points.
With the equities market on a roll, foreign funds pumped in dollars resulting in the rupee gaining by 14 paise since last Monday. Foreign funds have bought shares worth $46.2 million in the first two days of July after pumping in $554 million in June.
More From This Section
Since the beginning of the calendar year the Indian unit has appreciated by 118 paise against the dollar. Forward premiums edged lower on the last day of the week on the back of a strong outlook on the rupee.
The six months annualised forward premium, which on Monday finished at 2.73 per cent, ended at 2.76 per cent on Friday as against the previous day