The forwards also rose substantially tracking the spot rupee and closed about 10 to 12 paise higher than its previous day's close.
"It was a volatile day where the spot rupee remained bid throughout the day. It opened at 45.73/74 after a four paise correction due to the date change," said a dealer with a private sector bank. "There was some demand which did not have any supplies to mop it up which took the rupee down even further," he continued.
The demand was consistent with " practically no traces of speculative demand ," a dealer said. Despite the Reserve Bank of India's (RBI) regulations instructing corporates to liquidate their exchange earners foreign currency (EEFC) account balances in order to increase the supply of dollars in the market, dealers are unanimous that there is very little supply coming in through this channel. Whatever is coming in, is getting mopped up due to a huge underlying demand, dealers say.
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The exchange rate of the RBI is at 45.78 against 45.66 on August 16.
Today, the spot rupee is expected to open at 45.89/90 and could get bought to fall even further throughout the day. "It is very difficult to give a range that the rupee might keep. The rupee may fall below 46 or even we may see the RBI come in to intervene again and stop the fall," said a dealer with a foreign bank.
The forward premiums rose substantially, in tandem to the spot rupee, closing about 10 to 12 paise higher than its previous day's close.
The six month (annualised) closed at 4.68 per cent, up from 4.25 per cent from Wednesday. The one year (annualised) closed at 4.45 and the three month (annualised)closed at 5.25 per cent.
"There was some paying on the forwards by some nationalised banks but that still did not keep the premiums in check," said a dealer with a private sector bank.
Today, the forwards are expected to closely follow the movements of the spot rupee.