Offshore forwards shoot up with dollar inflows for share sales

“Overseas investors are likely to have entered into short-term contracts in the NDF market,” said Anindya Banerjee, currency analyst at Kotak Securities. This raised demand for dollars at a future date, sending premiums higher. Also, US Fed commentary cuts short positions in dollars with traders going long. “Elevated premium leaves an opportunity for arbitrages especially when local forward premiums are little changed,” he said.