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Thursday, Mar 24, 2005

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Rupee weakens; bond prices fall

Our Bureau

MUMBAI: The rupee ended at a one-month low of 43.77/78 against the dollar after touching an intra-day low of 43.81. The rupee had ended at 43.7250/7325 on Tuesday.

A dealer at a private bank said that the dollar strengthening against the euro and other currencies was responsible for the depreciation of the local currency. The rupee had marginally recovered during the day on the back of large inflows from the recent overseas sale of ADRs of a large bank. There was commercial demand at the level of 43.7350.

The forward premia market remained almost flat with the six-month premium closing at 1.51 per cent (1.5 per cent) and the 12-month premium closing at 1.37 per cent (1.394). Dealers said that all the action was at the spot market.

The bond prices fell by around seven paise with the news of the US Federal Reserve raising interest rates by a quarter percentage point.

The 7.38 per cent 10 year benchmark paper closed at Rs 104.83 (6.73 per cent YTM) on Wednesday against Tuesday's close of Rs 104.90 (6.72 per cent YTM). It had opened at a wide price range of Rs 105.50/70 (6.75 per cent YTM).

In the one-day reverse repo under the Liquidity Adjustment Facility, RBI received and accepted 27 bids amounting to Rs 18,550 crore. Call ratea closed at 4.75/85 per cent. In the CBLO market, 192 trades aggregating Rs 6,633.20 crore were put through in the rate range of 4.79 to 5.50 per cent.

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