The rupee advanced 0.5 percent to 50.0825 per dollar in Mumbai yesterday, taking this month’s gain to 6 percent, according to data compiled by Bloomberg. The three-month dollar- rupee forward premium fell 31 basis points, or 0.31 percentage point, to 8.30 percent in the biggest drop in a month.
“The rupee will open around 50.04 or 50.02 as Asian equities are higher today. It will then take out 50 before weakening again on oil importers’ demand for dollars.
‘‘I am positioning for a range from 49.92 to 50.30. The market is bullish on the rupee and in a sell-dollar mode. Traders are expecting a cut in the cash-reserve ratio at the central bank’s policy review today, which is why we have seen forward premiums fall. If that doesn’t happen, we could see some sell-off in the rupee.”
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