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Wednesday, Aug 28, 2002

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Re firms up; gilts range-bound

Our Bureau

Mumbai: THE rupee on Tuesday closed marginally higher at 48.50/5025 against the dollar as compared to Monday's close of 48.51/52 in the forex market.

The supplies of the dollar were seen to be high and demand low. Therefore the rupee was appreciating in the market that was capped by the State-run banks stepping in to buy dollars.

International currencies, mainly the euro, pound and the Japanese yen appreciated slightly against the dollar, as a result of which there was some selling pressure on the dollar, said a dealer.

The domestic unit opened at 48.50/51 (higher than Monday's close) and touched an intra-day high of 48.50 and an intra-day low of 48.5150 against the dollar.

The forwards premium were lower with the six-month premium closing at 4.04 per cent (4.05 per cent) and the one-year premium closing at 4.01 per cent (4.13 per cent).

State-run banks were seen buying forward dollars, which dealers speculate could be a means of the RBI intervening to stand against the tide of falling forwards.

However, the buying witnessed was in small volumes and was therefore unable to cause any sea change in the high supply-low demand forward premium market.

The Rs 5,000 crore auction of the 15-year Government paper and Rs 2,000 crore auction of the 30-year Government paper on Tuesday was oversubscribed with a cut-off yield fixed at 7.46 per cent and 7.95 per cent respectively.

Bond dealers contend that the cut-off yields were in line with market expectations.

The 15-year paper received a total of 260 competitive bids amounting to Rs 8,840.90 crore, of which 157 bids worth Rs 4,891.65 crore were accepted. Twenty-six non-competitive bids worth Rs 108.34 crore were accepted.

The 30-year paper received 119 competitive bids worth Rs 3,992.50 crore, of which it accepted 67 bids worth Rs 1,961.45 crore. Fifteen non-competitive bids worth Rs 38.548 crore were received and accepted.

Prior to the auction results coming in, bond prices firmed up by 5-10 paise in an otherwise cautious securities market.

"Market remained range-bound with low volumes of trade as dealers were waiting for the auction results to take a view on what direction the market may take in the near future,'' said a bond dealer with a private sector bank.

The 7.40 per cent 2012 paper opened at Rs 101.50 and got traded up to Rs 101.56/60. 11.40 per cent 2008 opened at Rs 123 and got dealt up to Rs 123.5/10. The 8.07 per cent 2017 opened at 105.20 and got traded up to Rs 105.30.

Call rates closed in the 5.75 per cent range.

In the one day repo, the RBI received 12 bids amounting to Rs 20,295 crore which was accepted partially for an amount of Rs 1,4207 crore at the rate of 5.75 per cent.

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