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Thursday, Jun 16, 2005

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Rupee tad lower; gilts range-bound

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MUMBAI: The rupee closed slightly lower against the US dollar on Wednesday as the dollar gained against currencies such as the euro and the yen, according to dealers. There was not much activity in the spot rupee, though there was two-way interest with good amount of buying and selling, they added.

The rupee ended trade at 43.65/66, slightly lower than Tuesday's close of 43.61. It had opened at 43.65 and touched an intra-day high of 43.62.

The fluctuating oil prices are unlikely to have any immediate impact on the rupee, the dealer added.

The forward premia market was marginally higher, with the 12-month premium closing at 1.29 per cent (1.25 per cent) and the six-month premium ending at 1.39 per cent (1.36 per cent).

In the bond market, prices saw an initial fall but recovered towards the end of the day.

A dealer at a private bank said, "Prices were range-bound as there was concern about the tightening liquidity. The Reserve Bank of India's (RBI) reverse repo auction saw just Rs 8,230 crore in terms of amount received. Besides, the price of crude which is above $55 was another worry."

Dealers said that the only positive was that domestic inflation figures for this week are expected to be drastically lower because of a high base effect.

The 8.07 12-year 2017 paper opened at Rs 108.40 (6.98 per cent YTM), fell to Rs 108.30 during the day but finally recovered to close at Rs 108.45/50 (6.99 per cent YTM).

The 7.38 10-year 2015 benchmark paper opened at Rs 103.40 (6.91 per cent YTM) and closed at Rs 103.48 (6.90 per cent YTM).

Call rate were in the 5-5.10 range (5-5.10). In the one-day reverse repo, the RBI received and accepted 25 bids amounting to Rs 8,230 crore. In the CBLO market, there were 198 trades, aggregating Rs 8,821 crore, in the rate range of 4.89 to 5.15 per cent.

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