Spot rupee is likely to rule in a band between 48.95 and 49.05 this week. Dealers said the Indian currency will remain largely unaffected by the monetary & credit policy announcements slated for Monday.
However, they said there can be some pressure in the beginning of the week due to month-end demand for dollars, which will ease in the later half.
Forward premiums may fall as the cash reserve ratio (CRR) and the bank rate are expected to be cut in the credit policy. The expected range for the six-month annualised premium during the week is 5.45 per cent to 5.65 per cent.
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"There is not likely to be any major announcement in the policy for the forex market. But as everybody is expecting the central bank to continue its easy monetary policy, premiums may dip further," said a dealer with a foreign bank.
He added that, while the impact of a CRR cut is mostly discounted, any reduction in the bank rate will result in a massive drop in premiums.
A section of the dealers also said the RBI's activity in the forex market through state-run banks will largely influence the rupee's value against the greenback.
The forex head of a new private sector bank said: "It seems the RBI is comfortable with the present level of the rupee. If the currency tries to breach the 49 mark once again, the apex bank will pump in dollars through the state-run banks. However, if the Indian unit strengthens too much, the central bank will start mopping up dollars."
Spot rupee ended at 48.96/97/90 against the greenback on Friday as against Thursday's close of 48.98/99. It opened at 48.99/49.00 and remained in the 48.96-49.0 band throughout the day. It ended stronger because of dollar supplies by state-run banks.
Meantime, the six-month annualised forward premium rose to 5.50 per cent, while the one-year premium closed at 5.35 per cent on Friday.