The spot rupee closed at 46.9850 on the back of good dollar purchases for payments by a public sector oil company today. Premiums closed lower as bonds rallied by about 3-4 paise.
"The spot rupee remained range-bound between 46.94 and 46.99 with most of the buying being done by public sector banks such as Bank of Baroda and Canara Bank," a dealer with a new private sector bank said. "The demand was primarily for an oil PSU through a few banks," he added.
The demand was supplemented by supply which was regular after the weekend lag. However, the supply was not enough to match the demand.
"The sluggish trend in supply is expected to continue through this week, while the genuine demand is also expected to put some pressure on the local currency," a foreign exchange dealer said.
The Reserve Bank of India's (RBI) reference rate for the dollar was 46.95 as against 46.96 on Friday. Tomorrow the spot rupee is expected to keep a 46.95-47.03 range, tilting towards a lower bias.
Forward premiums came off with receiving in the premiums and a drop in bond prices pushing prices even lower. The six-month annualised premium wound the day at 5.01 per cent, while the one-year annualised closed the day at 4.98 per cent. On Friday, both the premiums had closed at 5.12 per cent and 5.02 per cent, respectively.
"Along with the bond prices, overnight call rates also softened considerably which boosted the sentiment. On Friday, call rates were in the 8-8.25 per cent range, while today call rates were in the 7-7.25 per cent band. This can be cited as another reason for the softening of premiums," a dealer with a foreign bank said.
Near terms closed about 1-2 paise lower and far forwards closed about 3-4 paise lower. "The boost in the sentiment is likely to push premiums even lower during the week with maximum move seen today," a dealer with a private sector bank said. Tomorrow premiums may soften by 1-2 paise.
