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MUMBAI: The rupee further depreciated against the dollar on Wednesday but recovered some of its losses after a senior RBI official made a statement to the effect that the the apex bank could intervene to provide stability to the foreign exchange market

The local currency opened at 44.19/20 and dipped to an intra-day low of 44.35. It then recovered to touch 44.21/22 but finally closed at 44.27/28. On Tuesday, the rupee had closed at 44.2150/2250.

Dealers said that import-related demand as well as panic-buying by inter-bank players to cover positions caused the rupee to touch a low of 44.35.

The dealers said that the foreign institutional investor inflows into the market had eased in the last few days. In the forward premium market, the 12-month premium closed at 0.7 per cent (0.77) and the six-month premium closed 0.77 per cent (0.90).

In the bond market, the sentiment was bearish as dealers were wary of taking fresh positions ahead of the half-yearly review of the Credit Policy at the month-end.

Dealers said that there was some buying interest earlier in the day, but the announcement of a higher cut-off rate for underwriting bids of the auction of the 11.83 per cent Government stock 2014 paper led to the view that the Rs 9,000 crore auction on Thursday may not invite much interest.

The 10.25-16 year-2021 paper opened at Rs 125.25 (7.48 per cent YTM) and closed at Rs 125.03 (7.50 per cent YTM), lower than Tuesday's Rs 125.10 (7.50 per cent YTM). The 7.37 -9 year-2014 paper opened at Rs 102.05 (7.045 per cent YTM) and closed at Rs 101.90 (7.06 per cent YTM), almost the same level as Tuesday's Rs 101.91 (7.07 per cent YTM). The 7.38-10 year-2015 paper was dealt at 7.11 per cent YTM.

The call rate closed at 5.05-5.10 per cent (5.10). In the one-day reverse repo auction, RBI received and accepted 37 bids amounting to Rs 30,770 crore. In the CBLO market, there were 289 trades for Rs 14,154.30 crore in the rate range of 4.85 to 5.17 per cent.

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Rupee falls further; bonds bearish

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