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Saturday, Jun 18, 2005

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Rupee strengthens; bonds range-bound

Our Bureau

THE rupee made further gains on Friday against the US dollar on the back of steady inflows and a strengthening euro.

The domestic currency was range-bound during the day. It opened at 43.56/57, touched an intra-day low of 43.58/59, but closed firm at 43.55/56, up from Thursday's close at 43.58/59.

A dealer at a private bank said that the rupee was tracking the movement of the euro, which strengthened to $1.2170.

The rising price of crude oil was the only negative that stalled the rupee from strengthening further.

In the forward market, there was a slight fall with the 12-month closing at 1.20 per cent (1.25 per cent) and the six-month ending at 1.28 per cent (1.39 per cent).

In the bond market, prices moved in a 10-15 paise range; they opened lower on rising crude prices.

However, the modest inflation figure of 4.22 per cent, which is 100 basis points down from last week's figure of 5.20 per cent, drove prices to end higher.

The 7.55 5-year 2010 paper opened at Rs 103.50/55 (6.69 per cent YTM) and closed at Rs 103.65/69 (6.66 per cent YTM), up from Thursday's Rs 103.48/50 (6.7 per cent YTM). The 7.38 10-year 2015 benchmark paper opened at Rs 103.10/20 (6.95 per cent YTM) and closed at Rs 103.20/30 (6.94 per cent YTM), up from Thursday's Rs 103.05 (6.96 per cent YTM).

Call rates remained unchanged at 4.95-5.05. In the one-day reverse repo, the Reserve Bank of India (RBI) received and accepted 25 bids amounting to Rs 9,145 crore. In the CBLO market, there were 161 trades aggregating Rs 5,965.95 crore in the rate range of 4-5.31 per cent.

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