The Hindu Business Line : Rupee firms up; bonds decline

MUMBAI: The domestic currency strengthened for the third session in a row to close at 46.20/21 on Thrsday against the dollar . It ended up 10 paise from the previous close at 46.30/31.

The TCS IPO is expected to bring foreign inflows to the tune of $300 million, of which maybe $100 million found its way into the Indian markets, said a senior dealer with a foreign bank.

The forwards market did not witness a lot of activity. The six-month forward closed at 2.78 per cent (2.80 per cent) while the twelve-month forward ended at 2.46 per cent (2.45 per cent).

Bond prices fell by about a rupee as call rates tightened with the central bank accepting one bid in reverse repo worth Rs 5,000 crore at six per cent.

Call rates eased off towards the end of the day to 4.80 per cent but had risen to 5.60-6 per cent during the day, as some large borrowers were seen having substantial demand for funds, said dealers.

The yield on the 10-year benchmark 7.37 per cent 2014 paper rose to 6.64 per cent from morning levels of 6.52 per cent. The 11-year benchmark 7.38 per cent 2015 paper fell 80 paise to close at Rs 105.10.

Under the LAF window, the Reserve Bank of India received and accepted seven bids worth Rs 1,490 crore at the rate of 4.50 per cent.