Financial Daily from THE HINDU group of publications
Wednesday, Dec 04, 2002
Money & Banking
Re strengthens; gilts up
Mumbai: THE rupee ended on Tuesday at 48.2550/2650 against the dollar as compared to Monday's close of 48.27/28 in the forex market.
There was plenty of supply in the market, said a forex dealer. The supply is expected to continue, he added.
"The little buying witnessed on Tuesday was due to corporate demand, followed by mopping up of dollars by nationalised banks on behalf of the RBI,'' said the chief dealer in a bank.
The domestic currency opened at 48.26/27, touched an intra-day low of 48.2875 and an intra-day high of 48.23 against the dollar.
The forward premia were further falling, with the six months closing at 3.52 per cent (3.64 per cent) and the twelve months at 3.46 per cent (3.62 per cent).
G-sec prices moved up marginally by 15-20 paise across maturities on Tuesday.
The 7.40 per cent 2012 paper opened at Rs 106.95 and closed higher at Rs 107.10. On the longer end, the 8.07 per cent 2017 paper opened at Rs 111.95/112 and closed higher at Rs 112.15/20.
The Finance Minister's statement that the yields could fall down further, propped up the market, said a debt market dealer.
He also said that the small savings rate need to be brought in line with interest rates in the market. This move to remove the discrepancy in this administered interest rate was yet another fillip for the debt markets.
In the inter-bank call money market, the call rates closed comfortably at 5.35-5.40 per cent.
In the one-day repo auction, the RBI received 31 bids worth Rs 16,295 crore, all of which was accepted at the repo rate of 5.50 per cent.
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