The Hindu Business Line : Rupee slides; bonds firm up

MUMBAI: Another session of aggressive dollar buying by state-run banks pushed the rupee lower versus the dollar on Thursday. The rupee closed the day at 43.80/81 levels, against Wednesday's close of 43.73/75.

This is the third day in succession that state-run banks have been purchasing dollars. A dealer with a public sector bank here estimated that between $200 million and $300 million may have been bought up by PSBs in the market during the day. The rupee opened the day at 43.70/71 and recorded a high of 43.66 in intra-day trade.

The forwards closed a shade lower, perhaps reflecting the upbeat sentiment in the debt market. The six-month forwards finished at 1.85 per cent (2.70 per cent) and the 12-month forward at 1.53 per cent (1.70 per cent).

The debt market sentiment was positive and the 10-year benchmark paper breached 6.50 per cent to quote at 6.46 per cent near the close of trading. The paper moved by 30-35 paise after opening at 6.51 per cent yield to maturity. It had ended the previous session at 6.53 per cent.

The longer term papers also moved up sharply; the 8.35 per cent 2022 gaining nearly 70 paise during the session. According to the dealer, yields were likely to go down further in the coming days.

In the inter-bank call money market, which closed at 4.80-4.85 per cent levels. Around Rs 10,000 crore was put through in LAF.

In the CBLO market, 127 trades aggregating Rs 5,069.10 crore were put through in the range of 4.65-4.80 per cent.

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