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Friday, Jan 11, 2002

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Re at new low; gilts decline

Our Bureau

MUMBAI: THE rupee closed at a new low on Thursday at 48.3450/3650 per dollar in a forex market driven by apprehensions that the ``overvalued'' rupee may be allowed to find its own level.

The rupee ended around five paise weaker compared to the previous close of 48.31/3150.

After opening at 48.3450/3650 per dollar, the currency fell to an intra-day low at 48.44 following consistent and substantial mopping up of greenbacks by a Sate run bank, possibly at the behest of the RBI.

`` A section of the market men feel that the rupee is overvalued by around 2 per cent. Export growth has also been negative. Therefore, the Apex bank will be in favour of a weaker rupee", said a forex dealer with a private sector bank.

The rupee has been weakening steadily over the past week and is likely to fall further if the current uncertainty on the border continues. However, the RBI is expected to step in to prevent any steep fall.

Meanwhile, forwards remained relatively flat with the six-month premium ending at 6.20 per cent (6.20 per cent) and the premium for one year ending at 5.93 per cent (5.92 per cent).

Securities prices dipped by 5-10 paise over its previous closing levels, tracking a weak spot rupee in a largely quiet securities market.

Dealers said that the markets would continue to remain lacklustre until the Rs 5,000 crore auction on January 14. ``Market players are still very uncertain as to the direction to take and hence the limited activity in the bond market. The yield on this auction will help the market to decide its next course,'' said one dealer in a private sector bank.

The 11.03 per cent 2012 paper which had closed at Rs 121.65/75 previously, ended at Rs 121.58/61 today and the 11.50 per cent 2011 paper today closed at Rs 124.25/30 as against its previous close of Rs 124.35/40. The 9.85 per cent 2015 paper ended at Rs 114.60/65 as against its previous closing of Rs 114.60.

In the inter-bank call money market, the call rates closed at 6.40-6.60 per cent.

In the one-day repo auction, the RBI received and accepted bids of Rs 8,400 crore at 6.50 per cent.

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