The Hindu Business Line : Forwards edge up; bonds steady

Forex traders said the outlook for the domestic currency was that it would continue to strengthen, despite a possible correction at some point soon. "The way the rupee has been gaining there is an expectation of some correction in the near future. But even this might not be substantial. As long as the dollar inflows continue and the greenback continues to weaken against international currencies, the Indian currency will gain in line with the global trend," said a forex dealer with a private sector bank.

Dealers said that too many players were sitting on short dollar positions at the moment and there might be some short-covering over the next few days. The spot rupee opened at Rs 46.8150/8250 and touched an intra-day low of Rs 46.93 before settling at its closing levels.

Forwards inched up marginally, with the six-month premium ending at 0.60 per cent (0.40 per cent) and the one-year premium ending at 0.61 per cent (0.40 per cent).

Bond prices opened steady, dipped by 10-20 paise during the day and recovered before closing in a lacklustre government securities market.

The benchmark ten year paper, 7.27 per cent 2013 opened at Rs 111.15/20 and dipped to a low of Rs 111.05 before inching up again to close at Rs 111.20/25 levels. The ten-year yield is at 5.80 per cent at present. The 7.46 per cent 2017 paper opened at Rs 113.15/20 and fell to Rs 113.03 before closing at Rs 113.20 levels.

Bond dealers said the market was held steady on account of the abundant liquidity in the system, and although there was some selling by nationalised banks earlier in the day, some buying support came in post-repo.

Call rates hovered between the 4.90 per cent and 5 per cent levels in the inter-bank market.

Meanwhile, in the one-day repo under the LAF, the RBI received and accepted 37 bids amounting to Rs 19,270 crore at the rate of 5 per cent.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Time to review FCI funding norms

No significant increase in NRI inflows, says RBI

Forwards edge up; bonds steady

ABN Amro to offer home loans

Ministry halts IRDA move on motor tariffs

Andhra Bank kicks off campus hiring

World Bank to charge for loan prepayments by India

Online rail ticketing from ICICI Bank

Auditors qualify Andhra Bank accounts

ABN Amro to expand Chennai back office

LIC entry may change card business rules

`Our current account surplus shows poor investment climate'

Stern warns against rising fiscal deficit, debt