• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Our Bureau

MUMBAI: The rupee lost another 11 paise on Tuesday to close at 45.63/64 in its value against the dollar down from Monday's closing level of 45.54/56. The depreciation was triggered by a host of factors - lack of robust dollar supplies, corporate demand followed by inter-bank demand for the dollar and surprisingly even central bank dollar absorption, said market watchers.

Said a dealer, "It seems the Reserve Bank is sucking away dollars from the market to make importers and foreign currency borrowers who are punting on a falling rupee wary." Despite repeated words of caution from RBI, corporates are yet to hedge their forex exposures.

The rupee opened the day at 45.56/58 and touched an intra-day low of 45.66.

The forwards market slid further into discount, contrary to the spot movement. Typically a falling spot is followed by rising premia. The six months forward closed at - 0.13 per cent (0.15 per cent) and the one-year closed at 0.23 per cent (0.40 per cent).

The government securities prices moved up by 10-25 paise despite intra-day falls, with large-scale buying interest from primary dealers and mutual funds.

Traded volumes were capped at Rs 4,000-odd crore and the market recovered on realisation that it had magnified the CRR fears. The 8.07 per cent 2017 paper, which hit a low of Rs 122.35, gained to close at Rs 123.25. The 7.40 per cent 2012 paper which opened at Rs 115.35 closed 10 paise higher at Rs 115.45.

Flush with funds, inter-bank call money rates were easy and dipped to 4-4.25 per cent towards close.

In the LAF window, amounts of over Rs 17,000 crore were sucked away by the RBI at 4.5 per cent.

Article E-Mail :: Comment :: Syndication

Stories in this Section
KVB, ECGC in pact for bancassurance

Copyright © 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line