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Friday, Jul 01, 2005

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Rupee firms up; gilts weaken

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MUMBAI: The rupee substantially strengthened against the greenback on Thursday on the back of dollar inflows. The rupee opened at 43.53/54 and touched an intra - day low of 43.5450 as the euro weakened to $1.2040. But it recovered to close the day at 43.5150, up from Wednesday's close at 43.56/57. In the forward premia market, the 12-month premium closed at 1.3 per cent (1.31) and the 6-month at 1.48 per cent (1.45).

In the bond market, the prices initially rose in anticipation of the Rs 10,000-crore government auction getting cancelled or pruned. The easing of crude oil prices to $57.50 also caused the yields to fall, said dealers.

The 7.37-9-year-2014 paper, which is currently the most active paper, opened at Rs 103.35 (6.85 per cent YTM), rose to Rs 103.45 (6.84 per cent YTM) and closed at Rs 103.20 (6.87 per cent YTM). The 7.38-10 year-2015 benchmark paper was dealt at Rs 103.58 (6.88 per cent YTM), down from Rs 103.70 (6.86 per cent YTM).

The call rate remained tight at 5.70/75 (5.75-5.5). Dealers said that the advanced tax flows collected by the Government had not entered the system.

In the one-day reverse repo auction under the liquidity adjustment facility, the RBI received and accepted 15 bids amounting to Rs 6,470 crore. The CBLO market saw 244 trades being put through in the rate range of 5.05 per cent to 6.00 per cent, aggregating to Rs 7,259.35 crore.

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