Rupee sees marginal rise at 93.06 on dollar demand

Mumbai: The rupee marginally climbed Monday after a session of range-bound trading in which dollar sales through unwinding of arbitrage positions by lenders ahead of the regulator-set April 10 deadline was met with demand for the US currency from importers and oil companies.

The rupee ended Monday at 93.06/$, versus its Thursday close of 93.10/$. The rupee traded in the 92.80/$ to 93.10/$ range Monday amid unwinding of arbitrage trades by banks.

"At these levels, dollar demand surged after oil companies and importers bought the greenback to hedge and make payments," said Anil Bhansali, head of treasury at Finrex Treasury Advisors.

Hence, forward premiums jumped to their highest in nearly two decades on hedging demand. The 1-year dollar-rupee implied yield touched a peak of 3.96% before retreating to 3.57%.

Further strength in the rupee is likely as traders unwind to comply with the recent Reserve Bank of India (RBI) curbs on net open positions, capped at $100 million.

"The rupee is expected to trade around 93/$ levels, plus or minus 30-40 paise for this week. After that the movement depends on how oil reacts," said a currency trader at a private sector bank.