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Wednesday, Jun 22, 2005

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Rupee steady; securities gain

Our Bureau

MUMBAI: The rupee marginally strengthened against the dollar on Tuesday as foreign institutional investor inflows helped neutralise the effect of domestic fuel price hike.

The rupee opened weaker at 43.60/61, from Monday's 43.5725/5825. It closed the day nearly unchanged at 43.57/5750.

A dealer at a private bank said, "The steady FII inflows kept the market bullish. Monday's inflows were at $107 million. This is keeping the rupee from weakening despite the oil price hike and a falling euro".

In the forward premia market, there was a slight rise as the 12-month closed at 1.25 per cent (1.23) and the 6- month ended at 1.4 per cent (1.35).

In the bond market, prices rose by 30-40 paise but fell by 15 paise later in the day on profit-booking.

Dealers said that with liquidity staying comfortable despite the advanced tax outflows and the Government auction being announced on Monday, some of the market's concerns were put to rest. This caused the prices to rise.

The 8.07-12 year-2017 paper opened at Rs 108.45 (7 per cent YTM), rose to Rs 108.90 (6.94 per cent YTM) and closed the day at Rs 108.76 (6.95 per cent YTM).

The 7.38-10 year-2015 benchmark paper opened at Rs 103.50 (6.90 per cent YTM) and closed at Rs 103.65/70 (6.87 per cent YTM). On Monday, it had closed at Rs 103.30 (6.92 per cent YTM).

The call rates remained unchanged at five per cent. In the one-day reverse repo auction, under the liquidity adjustment facility, the RBI received and accepted 29 bids amounting to Rs 15,915 crore. The CBLO market saw 160 trades being put through in the rate range of 4-5.31 per cent aggregating Rs 6,237.35 crore.

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