Financial Daily from THE HINDU group of publications
Tuesday, Jul 27, 2004
Financial Daily from THE HINDU group of publications Tuesday, Jul 27, 2004 |
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Money & Banking
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Forex PSBs prop up rupee; gilts inching up Our Bureau
MUMBAI: The domestic currency strengthened on Monday due to heavy infusion of dollars by State-run banks, perhaps at the behest of the central bank, said dealers. The rupee closed about five paise stronger at 46.27/28 on the first day of the week. It closed at a year's low on Friday at 46.32/34. There was intense demand for the US currency from importers, corporates and some FIIs, but in the absence of inflows, the demand was supported by supply from the State-run banks, said dealers. . The six-month forward closed at 2.37 per cent (2.35 per cent) while the twelve-month closed at 1.89 per cent (1.96 per cent). Bond prices witnessed a movement of about 10 paise in medium-term papers amid volumes of around Rs 2,000 crore. The 10-year benchmark 7.37 per cent 2014 was traded up to 5.92 per cent yield to maturity (YTM) against the previous day's closing of 5.91 per cent YTM. The Rs 8,600 crore worth of State loan auction on July 28 had the market participants in a worried state, he added. Call rates closed at 3.50-4 per cent in the inter-bank market. Dealers said that liquidity in the market was reducing. Under the LAF window, the Reserve Bank of India (RBI) received and accepted 40 bids worth Rs 16,765 crore in the 7-day repo auction, while eight bids worth Rs 2,085 crore were received and accepted in the fortnightly repo auction.
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