Rupee ends steady; forward premiums fall sharply

Thursday, 19 December 2013 00:52 -     - {{hitsCtrl.values.hits}}

Reuters: The rupee ended steady on Wednesday as high inward remittances and exporter dollar sales were offset by importer dollar demand, while forward premiums came down sharply after yields in treasury bills fell in a weekly auction, dealers said. The spot rupee ended at 130.80/85 per dollar. However, one-year forward premium fell by Re. 1 after yields in T-bills fell to more than two-year lows. Yields in 91-day and 182-day Treasury bills dropped 12 basis points and 29 bps, respectively, at a weekly auction on Wednesday, while 364-day T-bill yield fell 62 bps. Dealers, however, said the rupee could be under downward pressure when importer dollar demand picks up in January. They expect the currency to hover at the current level until the end of this year. Central Bank Governor Ajith Nivard Cabraal last week said the monetary authority would only go in for limited intervention to prevent high volatility in the rupee. Currency dealers said the rupee was facing upward pressure as expatriates were sending money to their families ahead of Christmas and the New Year. The rupee has gained 3.3% since it hit a record low of 135.20 on 28 August.