"It was a choppy day on the spot rupee front with the rupee opening at 45.64-66, higher by 3 paise from its Friday close. There was a good two-way movement in the market with most of the nationalised banks buying throughout the day," said a dealer with a private sector bank.
"The spot rupee touched an intra-day low of 45.73-74 when there was some supply. This lead to rupee appreciating to reach an intra-day high of 45.62-64. It lost a little before closing at 45.69," he continued.
The Reserve Bank of India (RBI) exchange rate was 45.72 yesterday as against 45.88 on August 18.
There was an inflow of about $200-$300 million, most of which was from Exchange Earners Foreign Currency (EEFC) account liquidation. It was the second last day for liquidation with today being the last day before which 50 per cent of EEFC balances on August 11 have to be liquidated.
Today the rupee is expected to remain around 45.60-45.85 due to good supply on account of it being the last day for EEFC balance liquidation. "The sentiment is still negative, so once this EEFC deadline expires, the spot rupee is expected to weaken further," a dealer said.
Forward premiums closed about 5-7 paise higher with far forwards closing a full 10 paise higher from its previous close.
The six-month annualised premiums closed at 4.56 per cent as against its Friday close of 4.60 per cent. The one-year annualised premiums closed at 4.28 per cent from 4.30 per cent.
"There was some paying that was seen once the forwards opened slightly low. Forwards also reacted to the spot rupee but didn't recover with the spot rupee," said a dealer with a foreign bank.
Forward premiums are expected to remain in the current range and track the spot rupee. "It did move to a range that was slightly higher than expected," he added.
