The Hindu Business Line : Re loses 4 paise; gilts up

Dealers said that the slip in the rupee was on account of the carry-cost of nearly 12 paise that was incurred on Wednesday. "The rupee would have closed even weaker, but for the inflows that came into the market today,'' said one dealer.

The rupee opened at 48.83/85 and hovered at those levels before it rallied on the back of some inflows. State Bank of India was said to be supporting at levels of 48.80/82, by constantly mopping up dollars at those levels.

However, inflows at levels of 48.83, helped eased some pressure off the domestic currency. Dealers said that most of the inflows have been capital inflows, partly on account of foreign banks and insurance players bringing in more capital into the country.

Forwards closed lower with the six-month forward premium closing at around 5.7 per cent (6.10 per cent), while the 12-month forward premium closed at around 5.05 per cent (5.25 per cent).

Bond prices, which had opened weaker from previous closing levels, rallied by around 15-20 paise after the release of RBI's calendar for dated market securities.

The calendar released on Wednesday by the RBI on the auctions of the securities to be held in the first half of the year, stated that the RBI would conduct auctions to the tune of around Rs 68,000 crore as against a total borrowing programme of Rs 1,43,000 crore for the next fiscal.

Dealers said that prices recovered on the release of this calendar as the amount of Rs 68,000 crore seemed "very nominal'' as compared to the total borrowing programme of the Government.

The 11.03 per cent 2012 paper, which had opened at around Rs 125.20/25, rose by around 15 paise to Rs 125.40 and ended at around Rs 125.30/35. The 11.50 per cent 2011 paper, which was at around Rs 127.70/75 before the announcement of the calendar, rose to around Rs 128.05 before it closed at Rs 127.90/95.

In the inter-bank call money market, the call rates shot up to 7.25 per cent, but closed lower at 6.50-6.60 per cent.

In the one-day repo auction, the RBI received three bids of Rs 5,070 crore and accepted three bids of Rs 2,535 crore at six per cent.

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