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Thursday, Mar 14, 2002

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Rupee gains; gilts decline

Our Bureau

MUMBAI: THE rupee closed firmer on Wednesday at 48.72/7250 against the dollar as compared to the previous close of 48.7450 in the forex market.

Dealers said although there were some tense moments following the Supreme Court verdict on the Ayodhya issue which took the currency to an intra-day low of 48.7450, most apprehensions were dispelled when the VHP issued a statement that it would abide by the decision of the country's highest court.

"The market has been seeing good dollar supplies this month and some bunched up supplies came on Wednesday since the forex markets were closed on Tuesday for Mahashivratri. This helped the rupee stay supported at around these levels,'' said a forex dealer.

Good dollar supplies took the rupee to a high of 48.6950 at which point State-run banks started mopping up dollars and took the rupee down a couple of notches where it closed.

Meanwhile, forwards rose, with the six-month premium ending at 6.04 per cent (5.91 per cent) and the premium for one-year ending at 5.39 per cent (5.26 per cent).

Securities prices fell by around 40-50 paise, with the bond market reacting to the Supreme Court's decision of not allowing the VHP to go ahead with the puja.

Dealers said that in anticipation of trouble ahead in Ayodhya, there was some panic selling in the market.

The 11.50 per cent 2011 paper, which had opened at around Rs 127/127.10, fell to around Rs 126.50 before closing at Rs 127.63/65 (YTM--7.57 per cent). The 11.03 per cent 2012 paper ended at Rs 124.20/25 after opening at Rs 124.50/60 and the 9.85 per cent 2015 paper closed at Rs 118.06/10 after opening at Rs 118.50/60.

The 10.71 per cent 2016 paper, which had opened at around Rs 124.80, closed at around Rs 124.25/30.

Said one dealer, "The sentiment is poor as market expects trouble ahead with the Court ruling.

However, there is nothing fundamentally wrong and liquidity continues to be easy.'' He added that prices fell on Wednesday as there was little bidding interest coupled with huge selling pressure in the market.

Call rates ended steady at 6.40-6.60 per cent in the inter-bank call money market.

In the one-day repo, the RBI accepted bids of Rs 75 crore at six per cent.

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