The Hindu Business Line : Rupee sheds 22 paise; bonds up

MUMBAI: The rupee closed weaker by 22 paise on Tuesday to end at 46.0450/0550 against the dollar. The domestic currency had closed at 45.82/84 on Monday.

Good demand for the greenback from PSU banks was witnessed throughout the day, said dealers. There could be demand on account of defence related payments and oil import bill, they said.

A weakening trend was observed when the domestic currency moved from the opening levels of 45.85/87 to 45.95. The intra-day low was 46.08.

Market players expect rupee to trade in the range of 45.85-46.08 till the Budget.

The forwards market extended its decline. The six-month forward closed at 1.16 per cent (1.33 per cent), while the twelve-month forward closed at 1.06 per cent (1.53 per cent). Bond prices moved up by 5 to 10 paise during the day but the market consolidated to fairly similar levels of the past trading sessions, said dealers.

The ten-year benchmark 7.37 per cent 2014 paper moved up by 25 - 30 paise during the day only to recoup the increase at the end. The closing yield was at 5.70 per cent with a closing price of Rs 112.45.

The 8.07 per cent 2017 paper opened at Rs 118.35, moved down to Rs 118.08 before closing at Rs 118.26/27.

The market has seen profit taking by a few players after the rally, said traders. The expectation of the market participant's view a slight off take of about 20-25 paise before the budget, in an otherwise balanced market.

The Railway Budget, which did not contain several populist measures, made the bond market heave a sigh of relief, though the prices in the G-sec market remained neutral to its announcements, said a bond trader with a bank.

The call rates were stable at 4.25-4.50 per cent. Under the liquidity adjustment facility of the RBI, 39 bids were received and accepted worth Rs 15,015 crore.