Spot rupee ended marginally stronger at 47.98/48.01 today compared with yesterday's closing of 47.98/48.02. Volumes, however, remained very low.
Forward premiums continued to move up from yesterday as call rates surged afresh.
The local currency though ended stronger against the dollar, after seeing two-way movements. It opened around 47.99/48.01, but came down to 47.95, and touched 48.05 before winding up at 47.98/48.01.
Dealers said there was no panic and the rupee moved according to the demand. It was largely the importer demand that was the driving force behind the rupee movement. There was no major dollar supplies from the state-run banks to prop the local currency.
The treasury head of a private sector bank said, "The situation is much better now. The importer demand has come down significantly and the rupee is now able to remain in a range even without the supply form the nationalised banks."
Forward premiums continued to move up tracking a tight call money market.
The 6-month premium went up sharply by 55 basis points to touch 7.50 per cent compared with yesterday's closing of 6.95 per cent while the one-year premium went up by 25 basis points to 7.25 per cent compared with yesterday's closing of 7 per cent.
"Forward premiums continued to remain volatile as call rates touched 15 per cent today because of advance tax outflow," said a dealer with a nationalised bank.
The spot rupee is likely to remain stable in the coming week in the 47.95-48.05 range.
The treasury head of a private sector bank said, "The rupee to be in the same range as we expect any further slippage will be arrested by the state-run banks."
Dealers also mentioned that the demand from the importers is likely to go down further and ease pressure on the rupee.
Dealers feel that the pressure on premiums will continue as call rates will remain firm even in the coming week.
"Advance tax outflow will keep the overnight rates high and hence there will not be much improvement of the forward rates," said a dealer with a nationalised banks.
