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Thursday, Mar 07, 2002

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Rupee firm; securities dip

Our Bureau

Mumbai: THE rupee closed marginally firmer on Wednesday at 48.68/69 against the dollar as compared to the previous close of 48.6950/7050 in a lacklustre forex market. The rupee opened at 48.6950/7050.

Forex dealers said that foreign banks were liquidating dollars to cover their reserve positions before Reporting Friday. Nationalised banks mopped up the dollar supplies and so demand and supplies remained evenly matched for most of the day.

Meanwhile, forwards closed higher with the six-month premium ending at 5.71 per cent (5.85 per cent) and the premium for one-year ending at 5.29 per cent (5.40 per cent). "Forwards rose on account of importer panic with regards to political tensions and issues such as Gujarat riots at the present time'', according to dealers.

Securities prices continued their downward spiral falling by around one rupee on Wednesday from their previous closing levels.

Dealers said that though the liquidity in the system was good, the market was operating on thin volumes. On Wednesday, volumes dealt in the market were to the tune of around Rs 2,800 crore.

The 11.50 per cent 2011 paper, which had closed at Rs 128.25 previously, ended at around Rs 127.50 and the 11.03 per cent 2012 paper, which had closed at Rs 126.75 previously, ended at around Rs 125.20 (YTM--7.48 per cent). The 9.85 per cent 2015 paper closed at around Rs 119.17 after ending at Rs 120.25 previously.

According to one dealer, "Some players have built huge positions and are now finding it difficult to exit as there is no support from nationalised banks who have the funds.''

Dealers, however, said that the underlying sentiment continued to be bullish as the market was assured of the RBI's continued bias towards softer rates.

In the inter-bank call money market, call rates closed below 6.50 per cent. In the one-day repo auction, RBI accepted bids of around Rs 5,000 crore at six per cent.

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