Strong dollar supplies saw the spot rupee recover to close at 46.59 against the dollar compared with Thursday's closing level of 46.73/74.
Forward premiums moved marginally lower with the six-month annualised premiums closing at 4.05 per cent against 4.10 per cent on the previous day.
The spot opened at 46.72/73 and went on to touch an intra day low of 46.74/75 against the dollar. Dollar sales pushed the spot rupee to a 46.67/68 level by afternoon. The demand during the day was weak and by afternoon banks and exporters sold dollars heavily, rendering the rupee stronger towards its closing level. The Reserve bank of India's (RBI) reference rate was 46.69 against 46.76 on the previous day.
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"The spot rupee gained substantially against the dollar to close much higher at 46.59. Banks and corporate liquidated their long positions.
The closing of the $4-billion India Millennium Deposit (IMD) issue on Monday, had a positive effect on the spot rupee. Most buyers have postpones their dollar purchases till the closing of this issue," said a dealer with a private sector bank.
"We expect the spot to range within 46.50 and 46.55 on Monday. A thin demand for the dollar is predicted with fairly good supply," said a dealer .
A stable spot rupee led the forwards to come off marginally. The one-year annualised forward premiums closed at 4.10 per cent against 4.20 per cent on Thursday. Importers took advantage of the strong rupee and booked long positions.
"Forward premiums came off on account of a strong spot rupee. However, The six-month annualised premiums did not penetrate the 4 per cent mark as call rates moved up during the day," said a dealer.
"We expect the premiums to come off further on Monday. The six-month annualised premium is expected to be range bound within 3.90 and 4.05 on Monday," he added.