The spot rupee ruled in a narrow band of 48.7500-48.8075 today following continuous dollar buying by public sector banks (PSBs).
Forward premiums eased a bit even though call rates ruled high. The rupee opened in the 48.7500/7525 range. Though there were dollar supplies on account of export proceeds, nationalised banks continued their dollar buying. This pushed the rupee to 48.8075 levels.
The currency, however, closed a tad higher at 48.8000/8025 at the end of the day.
In the forward premium market, the six-month annualised premium closed at 5.60 per cent against yesterday's closing of 5.70 per cent. The one-year premium dropped to five per cent from yesterday's closing of 5.10 per cent.
A dealer with a private sector bank said: "Call rates were high, but the market read it as a temporary aberration. Moreover, the US interest rates have also shown signs of going up. Both these factors helped the premiums to come down a bit."
The spot rupee is expected to be in the 48.75-48.85 range next week. Forex market dealers said that demand for dollars can be high as the market will open after four days from today. But the Reserve Bank of India is unlikely to allow any sharp fall in the currency against the greenback and hence the rupee is expected to remain stable.
Forward premiums are likely to remain stable with a downward bias as call rates are likely to slip with the beginning of the new financial year.
A dealer with a foreign bank said: "In the new financial year, the liquidity situation in the overnight market will improve as the nationalised banks will start lending. This will help the rates to ease further."
Dealers are expecting the six-month annualised premium to be in the 5.60-5.75 per cent range and the one-year premium to hover around 5 per cent.
