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Our Bureau

MUMBAI: The rupee gained against the dollar on Tuesday due to good inflows into the domestic equity market and a strengthening yen.

The rupee opened at 44.28/30 and ended at 44.21, higher than Monday's close of 44.23/24.

According to a chief forex dealer with a private bank, the rupee also moved up on the back of yen's gain against the dollar. "The rupee may continue to gain if the yen strengthens, because then there would be buyers for the Indian currency," he said.

The forward premia eased for the second consecutive day. The six-month premium closed at 1.79 per cent (1.83 per cent) and the 12-month premium closed at 1.47 per cent (1.5 per cent).

Bond prices fell as the cut-off price of the long-term government paper scheduled for auction on Tuesday was below expectation. The RBI auctioned the 7.40 per cent 29-year 2035 paper and 7.46 per cent 11-year 2017 paper, worth Rs 3,000 crore. The cut-off price for the 7.40 per cent paper was Rs 97.27, while the market was expecting around Rs 98.5.

The 8.07 per cent 11-year 2017 paper opened at Rs 105.65 (7.31 per cent YTM), touched a high of Rs 105.07, before ending trade at Rs 105.32 (7.35 per cent YTM), against Monday's close of Rs 105.53 (7.32 per cent YTM).

The 9.39 per cent 5-year 2011 paper opened at Rs 110.91 (6.93 per cent YTM), touched a high of Rs 110.96 and closed at Rs 110.75 (6.96 per cent YTM).

Call rates opened in the range of 7-7.25 per cent and closed at around 7.10 per cent (7-7.25 per cent).

In the first one-day auction, the RBI received one bid in the reverse repo for Rs 100 crore and 16 bids for Rs 3,315 crore in the repo. In the second one-day reverse repo auction, it received one bid for Rs 70 crore and 12 bids for Rs 2,215 crore in the repo auction. In the CBLO market, there were 288 trades for Rs 16,347.75 crore in the 6.45-6.60 per cent.

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