"The spot is expected to open at 45.79. Reserve Bank of India (RBI) intervention regarding the exchange earners foreign currency accounts and ADR issues, will make the rupee stronger in the first two to three days of the week. However, the demand-supply imbalance would resume from Wednesday or Thursday and render the rupee weaker. The sentiment for the forward market is expected to be the same," said a dealer in a public sector bank.
"Trading in the forward market will be weak and range bound due to nervousness in the market caused by the volatility of the rupee," said a dealer . The main action will be on the rupee front, as people will be cautious on selling the dollar in anticipation of a depreciation in value of the rupee, he added.
During the week, the rupee opened at 45.42 on Monday and depreciated almost 10 to 12 paise daily. It crossed the 46-mark and reached an all time intra-day low of 46.07 on Friday.
The market on Friday saw an appreciation in the rupee to the tune of around 20 paise. The closing rate for the weekend was 45.79 as compared to 45.85 on Thursday. The rupee was at an all time low when the RBI stepped in and controlled the freefall on Friday.
Forward premiums for the week remained low and in the range of 4.82 to 4.5 for the six months annualised premium. There was a depression in the market due to the spot rupee. The market closed lower at 4.56 per cent as compared to 4.59 per cent last week. During the week the market reached a peak of 5.26 per cent . It closed at 4.56 per cent from 4.81 earlier during the day on Friday.
Exporters are expected to indulge in extensive selling and importers are advised to stay out of the market in the week ahead.
