The rupee closed a tad lower at 48.02/03 on Tuesday after hitting successive highs for the sixth day. Opening the day almost steady at 48.00/01 compared to its overnight levels of 48.0025/0125, the rupee lost some grounds due to heavy dollar buying by state-owned banks, on the behest of RBI. The intra-day low was seen at 48.04 level. Later, as players offloaded their long-dollar positions ahead of the Christmas holiday, the rupee came off its early losses. Players do not want to hold any substantial position ahead of a holiday, dealers said. But towards the end, month-end dollar demand pushed the rupee down to close lower at 48.02/03 levels. Medium-term outlook for the rupee, however, remains favaourable against the backdrop of unabated dollar inflows and also due to dollars weaknesses against other major currencies. Meanwhile, the RBI fixed its reference for dollar at 48.01 (47.99).
FORECAST: The rupee seen gaining on Thursday.
Forward premiums held range-bound with a slightly upward bias. Both the six-month and the one-year annualised dollar premiums closed higher at 3.72% and 3.41% respectively. There was not much movement in the forward market, but premiums rose marginally, tracking the rupee movement, a forex dealer said. The rupee closed a tad lower at 48.02/03 compared to its overnight levels of 48.0025/0125. There was some early pressure on the liquidity situation, which improved in the afternoon, and that stopped forward premiums from rising sharply. In month-wise premiums, the December dollar closed steady at 2/3 paise while the March dollar closed at 43/45 paise. In the far forwards, the June dollar closed at 88/89 paise with the Sept and Nov dollar closing at 130/132 paise and 153/155 paise respectively.
FORECAST: Forwards seen steady on Thursday.
Government securities prices rose in afternoon trades amidst improved liquidity condition. Select longer-end papers rose by around 80 paise, while prices at medium-end papers rose by around 30 paise. The benchmark 10-year yield on the 7.40 per cent 2012 paper was seen at 6.2737 per cent fairly close to its all-time low level of 6.2634 per cent hit on Saturday last and off the days high of 6.3174 per cent but lower than its Mondays close of 6.2969%. Good buying was also seen at the 10.81per cent 2026 paper which rose by 80 paise. In the morning, prices were seen falling with a slight strain in liquidity. But once the pressure was over, market players turned themselves into buying mode. Dealers said the upbeat outlook prevailed despite a slightly higher yield set at the 364-day T-bills auction.
FORECAST: Prices seen rising on Thursday.
Compiled by Atmadip Ray