The spot rupee continued to remain in a tight range between 48.75 and 48.7650 today, but forward premiums went up tracking the overnight rates.
The Indian currency opened at 48.7500/7550 per down, went down marginally to close at 48.7600/7650.
A dealer with a foreign bank said the volume of trading was very thin. "There was not much supply of dollars, and nationalised banks were mopping up the greenback," he added.
Dealers said nationalised banks were acting on behalf of the Reserve Bank of India (RBI).
The six-month annualised forward premium ended at six per cent as against Friday's close of 5.90 per cent. The one-year premium went up to 5.20 per cent from 5 per cent.
According to a dealer with a private sector bank, two factors affected premiums today. "First, the call money rates were high. And secondly, at the end of each financial year, there is pressure on the premiums and this year is no exception," he said.
The spot rupee is expected to be in the 48.70-48.80 range tomorrow. The treasury head of a private sector bank said: "The Indian currency is still overvalued against the greenback on a trade-weighted real effective exchange rate basis. With this in the background, it is quite likely that the RBI will not allow the rupee to appreciate. The apex bank will continue to mop up dollars from the market through state-run banks."
Forward premiums are likely to remain firm. "As far as the premium market is concerned the condition will be similar tomorrow as the money market condition is unlikely to change drastically," a dealer with a foreign bank said.
Forex dealers expect the six-month annualised premium to be in the 6.10- 6.15 per cent range and the one-year premium to hover between 5.18 per cent and 5.25 per cent.
