The Hindu Business Line : Rupee firmer; g-secs move up

MUMBAI: Call rates in the inter-bank market on Tuesday moved up to 5.00 per cent, dealers said. A few quotes were also received for 5.25 per cent, with the range being 4.75 -4.95 per cent.

There was a demand and supply mismatch as nationalised banks borrowed heavily in the inter-bank market, traders said. Tight liquidity was primarily due to fund outflow on account of advance tax payments and CRR hike.

Bond prices during the day went up by 25 paise but later settled to close about 10 paise higher than previous closing. The 10-year benchmark 7.37 per cent 2014 paper was traded as high as Rs 109.15 at the yield of 6.11 per cent before it ended lower at Rs 108.90 at a yield of 6.12 per cent. The 11-year benchmark 7.38 per cent 2015 paper finished at Rs 109.60.

Meanwhile under the LAF window, the RBI accepted all the 5 bids in the 7-day repo and all the 14 bids in the 1-day repo worth Rs 645 crore and Rs 4,880 crore respectively.

In the CBLO market, 130 trades worth Rs 4,133.85 crore were transacted in the rate range of 4.35-5.00 per cent.

The rupee strengthened by about four paise to close at 45.8350 against the dollar. The Indian currency had ended at 45.87/88 in the previous close.

Dealers said higher FII inflows had impacted the rupee positively; dollar supplies from foreign investors with substantial dollar selling interest was observed. Weakening of the greenback overseas also helped the domestic currency.

Forward premia moved up. The six-month forward closed at 1.90 per cent (1.89 per cent) and the 12-month forward at 1.61 per cent (1.58 per cent).