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Tuesday, May 17, 2005

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Rupee weakens; bond prices fall

Our Bureau

MUMBAI: The rupee weakened against the US dollar on Monday and closed at 43.4950/50, down from Friday's close at 43.42/43.

With the revaluation of the Chinese yuan now on the backburner as well as a strong US job data report last week, the dollar has been strengthening against other foreign currencies, said dealers.

There was also some concern with respect to rupee's appreciation being stalled. A dealer at a private bank said, "The Real Effective Exchange Rate report has shown that the rupee is slightly over-valued. Therefore, there is a concern that the central bank might intervene to protect exporters."

In the forward premia market, the 6-month closed at 1.58 per cent and the 12-month ended at 1.38 per cent.

Bond prices fell by 15-20 paise as the Rs 7,300 crore state loan auction on May 17 caused some concern about the outflow of liquidity.

The 7.55-5 year-2010 opened at Rs 103.20 (6.78 per cent YTM) and saw a low of Rs 103 (6.83 per cent YTM). It closed the day at Rs 103.5 (6.82 per cent YTM).

The 8.07-12 year - 2017 paper opened at Rs 105.50 (7.36 per cent YTM) and dropped to Rs 105.30 (7.38 per cent YTM). It finished trade at Rs 105.28/32 (7.38 per cent YTM).

The 7.38-10 year-2015 benchmark paper was traded at Rs101.40 (7.18 per cent YTM), down from Friday's close at Rs 101.48 (7.17 per cent YTM)

Call rates closed at 4.95-5.05 per cent. In the one-day reverse repo, under the liquidity adjustment facility, the RBI received and accepted 32 bids, amounting to Rs 20,020 crore. The CBLO market saw 187 trades amounting to Rs 8,244.35 crore, in the rate range of 4.80 to 5.10 per cent.

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