The Hindu Business Line : Rupee gains 30 paise; gilts firmer

MUMBAI: The rupee gained more than 30 paise against the US dollar on Wednesday as the market interpreted the US Federal Reserve statement as an indication of slowing down of rate hikes. On Wednesday, the rupee opened at 45.93/94 and gained steadily during the day. It ended trade at 45.73/74, up from Tuesday's close of 46.09. "The dollar has rallied a lot against most currencies, so this is a temporary correction," said a dealer with a private bank. The dollar may lose ground through this month and make a comeback after that, he said.

The forward premia tracked the rupee, with the six-month closing at 0.76 per cent (0.89 per cent) and the one-year closing at 0.65 per cent (0.72 per cent).

In the bond market, prices rose by around 15 paise in response to the Fed signals.

A dealer at a private bank said that RBI statement about having taken adequate measures to handle the IMD redemption due in December also caused a spurt in the prices.

The 8.07 - 12 year-2017 paper opened at Rs 106.36 (7.225 per cent YTM) and closed at Rs 106.45 (7.21 per cent YTM), up from Tuesday's Rs 106.297 (7.23 per cent YTM). The 10.25 -16 year-2021 paper opened at Rs 126.12 (7.39 per cent YTM) and ended at Rs 126.25 (7.375 per cent YTM), higher than Tuesday's close at Rs 126.08 (7.39 per cent YTM).

The call rate closed at 6 per cent but touched an intra-day high of 6.40 per cent (5.80-90).

In the first one-day reverse repo auction, the Reserve Bank of India received and accepted four bids amounting to Rs 550 crore. In the second auction, it received and accepted three bids for Rs 485 crore. In the CBLO market, there were 302 trades for Rs 12,998.60 crore in the range of 1.00-6.15 per cent.