The Hindu Business Line : Rupee recovers; bond prices fall

MUMBAI: The rupee recovered some of its losses on sustained selling of dollars throughout the day on Tuesday and ended trade at 43.61, against the US dollar, higher than Monday's close of 43.67. The dollar fell globally, after seven to eight days of rally, which also aided the rupee. The forward premia market too closed 1.2 per cent higher. The 12-month premium closed at 1.25 per cent (1.27 per cent) and the 6-month premium closed at 1.36 per cent (1.4 per cent).

Bond prices fell on account of a tightening of liquidity due to outflow of around Rs 2,500 crore in the state loans auction and around Rs 10,000-12,000 by way of corporate tax advance, said dealers.

The 7.38 10 year-2015 benchmark paper opened at Rs 103.40/50 (6.88 per cent YTM) and closed at Rs 103.35/40 (6.92 per cent YTM) against Monday's close of Rs 103.50 (6.8950 per cent YTM). The 7.55 5-year 2010 paper opened at Rs 104.70/75 (6.65 per cent YTM) and closed at Rs 104.72/75 (6.65 YTM). LIC was seen selling in long term papers, especially in the 10.25 per cent 2021 on Tuesday also.

In the one-day reverse repo, RBI received and accepted 28 bids amounting to Rs 10,745 crore. Call rates were in the range of 5-5.10 per cent (4.90-5.10 per cent). In the CBLO market volumes once again touched a record high, with 183 trades, aggregating to Rs 9842.50 crore, in the rate range of 4.81 to 5.10 per cent.

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