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Wednesday, Jun 29, 2005

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Rupee tad weaker; bonds recover

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MUMBAI: The rupee fell marginally on Tuesday, following increased dollar demand in the forex market. Traders said there was dollar buying on behalf of oil companies to meet their import requirements.

The fall in the Indian currency was also aided by the weakening of major foreign currencies such as the euro and the yen against the dollar. The fall in the stock prices also had an impact on the rupee, the dealers said.

The rupee opened at 43.51/52 and then slipped to an intra-day low of 43.55/56. It closed the day at 43.52/53, down from Monday's close at 43.4950/50. There was a fall in the forward premia market, as the 12-month contract closed at 1.31 per cent (1.34) and the six-month closed at 1.44 per cent (1.52).

In the bond market, prices recovered after Monday's fall of 40-70 paise. The 7.37 nine-year 2014 paper, which is currently the most active paper, opened at Rs 102.90 (6.92 per cent yield to maturity/YTM). It touched an intra-day high of Rs 103.35 (6.85 per cent YTM) and closed at Rs 103.20 (6.88 per cent YTM). The 7.55 five-year 2010 paper opened at Rs 103.65/70 (6.66 per cent YTM) and closed at Rs 103.85 (6.61 per cent YTM). The 7.38 ten-year 2015 benchmark paper opened at Rs 103.20 (6.93 per cent YTM) and closed at Rs 103.50 (6.89 per cent YTM), up from Monday's close at Rs 103 (6.96 per cent YTM).

The call rate opened higher at 6.00, but eased to 5.5 during the day. It closed the day at 5.25-5.5 per cent. In the one-day reverse repo auction under the liquidity adjustment facility, the RBI received and accepted 12 bids amounting to Rs 3,640 crore. The CBLO market saw 206 trades being put through in the rate range of 4.05-6.00 per cent, aggregating to Rs 6805.15 crore.

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