The Indian rupee gained on Tuesday, buoyed by positive domestic equities and a steady euro and after the central bank signalled the latest rate increase may be the last in the current cycle, although any reprieve for bonds is seen as temporary given the supply stockpile.
The partially convertible rupee, which had remained largely unchanged after the policy decision, ended at 49.51/52 per dollar, stronger from its previous close of 49.825/835. "Rupee will be choppy for a month-and-a-half at least. It should move in a range of 48.50-51.00 during that time. Any improvement in rupee's fortune are likely only in first quarter of calendar year 2012," HDFC's Parthasarthy said.
The one-month onshore forward premium on the rupee was at 24.5 points from 25.25 on Monday, the three-month premium was at 63.5 points from 64.5 and the one-year premium was at 147.5 points, from 150. The one-month offshore non-deliverable forward contracts were quoted at 49.97, weaker versus the spot rupee rate. In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange were all at 49.7225. The total traded volume on the three exchanges was $1.44 billion.
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