Written by Jaspreet Kalra
Mumbai, March 5 (Reuters) –The Indian rupee fell slightly on Tuesday, weighed down by declines in most Asian currencies, while overnight swap rates and short-term futures premiums declined.
Rupees INR=IN At 10:48 AM IST, it was 82.9100 against the US dollar, and in the previous trade it was 82.89.
While most Asian currencies declined, the dollar index rose slightly to 103.87.
Asian currencies have had to contend with rising US yields. The yield on the 10-year U.S. Treasury was last announced at 4.21% after rising 4 basis points (bps) on Monday. Two-year bond yields rose 7 basis points.
The rupee is expected to remain around 82.90 rupees, traders said, and exporters should keep the rupee’s weakness in check during the day.
The rupee’s recent narrow range is expected to continue.
“In the short term, the rupee is expected to remain within a narrow range of 82.80-83.10 rupees,” said Amit Pavali, managing director at currency advisory firm CR Forex.
Meanwhile, the dollar-rupee forward premium fell, with the March premium falling to 3.50 paisa. The decline in the near premium was driven by a decline in overnight swap rates.
The overnight swap rate fell to 0.15 paisa, indicating the dollar’s tightness. Traders say the Reserve Bank of India’s persistent intervention is impacting dollar liquidity.
The near-term dollar/rupee pair came under further pressure with RBI’s swap expiration approaching and $5 billion outflow from the system.
Probably the RBI receive delivery Buy-sell swaps amount to $5 billion, Reuters reported on Monday.
Report by Jaspreet Kalra.Editing: Sohini Goswami