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Thursday, Feb 02, 2006


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Money & Banking - Forex

Rupee slumps; bonds edge up

Our Bureau

MUMBAI: The rupee slumped against the greenback on Wednesday on the back of oil-related demand for dollars and a fall in the domestic stock market.

The home currency opened at 44.09/10 and fell during the day to close at 44.21, down from 44.12 on Tuesday.

Dealers said the hardening of global crude price to $67.7 sparked some importer-related buying. A dealer at a private bank said the RBI could have been buying dollars for generating liquidity in the system.

There was a slight fall in the forward premia market, as the 6-month ended at 2.37 per cent (2.45) and the 12-month closed at 1.80 per cent (1.90).

In the bond market, the prices were up by around 5 paise. Dealers said the bond market interpreted the language of the US Fed as "less hawkish." Though prices opened around 20 paise higher from Tuesday, a statement from the Ministry of Finance about auctions being carried out as per schedule pulled the market down.

A dealer at a private bank said that the announcement about the Rs 9,000-crore auction scheduled for February was awaited.

The 8.07 per cent-11 year-2017 paper opened at Rs 105.30 (7.36 per cent YTM) and closed at Rs 105.24 (7.36 per cent YTM), up from Tuesday's Rs 105.19 (7.37 per cent YTM). The 10.25 per cent-15 year-2021 paper opened at Rs 125.25 (7.46 per cent YTM ) and closed at Rs 125.30 (7.45 per cent).

The call rate closed at 6.75-6.90 per cent (7 per cent). In the first one-day reverse repo auction, the RBI received one bid for Rs 25 crore but there were 29 bids for Rs 9,200 crore in the repo auction. In the second one-day reverse-repo auction, the RBI received three bids for Rs 2,115 crore and 12 bids for Rs 4,500 crore in the repo auction. In the CBLO market, there were 344 trades for Rs 20,160.60 crore in the 6.35-6.58 per cent.

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