The Indian currency strengthened marginally by 10 paise to 35.66 on Friday last due to a dollar sell-off by a leading development financial institution (DFI). According to dealers, a few corporates could have sold dollars to the DFI which, in turn, offloaded the same in the market.
Treasury heads felt that the rupee will not harden against the dollar as long as corporates do not resort to selling the greenback in a big way.
However, bankers are credited with the view that the Reserve Bank of India (RBI) will step into the market if the rupee continues to appreciate against the greenback.
The central bank had been buying the US unit at Rs 35.72-Rs 35.73 for two consecutive days last week. However, the supply of dollars being sufficient, the rupee did not lose ground.
"Even the buying of dollars by the State Bank of India (SBI) did not affect the rupee as the supply of greenbacks was adequate to meet the SBI's demand," a dealer with a private bank said.
With the month-end pressure easing, it is unlikely that the Indian currency will decline below the 35.80-mark against the dollar.
The forwards, on the other hand, are envisaged to be on the softer side this week and rule in the vicinity of 10.50 per cent.
"The six- monthly premium may remain largely unchanged, though a slide towards the end of the week is not outside the realm of possibility," a dealer with a bank said.
According to dealers, the near-premia, too, could be lower as the call rates remain easy.
"With calls likely to be low, the one-month forwards quote low," a treasury head with a private bank said.
