Financial Daily from THE HINDU group of publications
Tuesday, Sep 03, 2002

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Re strengthens; gilts rise

Our Bureau

MUMBAI: THE rupee closed on Monday at 48.4750/48 against the dollar as compared to its previous close of 48.4950/5000 in the forex market. Accumulated dollar supplies came into the market. To add to the good supply, there was all round selling on spot basis, said a dealer in a private bank.

The domestic currency opened at 48.50/4950 against the dollar, touched an intra-day high of 48.4675 and an intra-day low of 48.4875.

The forward premium market did not witness much activity with low volumes traded.

The six-month premium closed at 4.07 per cent (4.06 per cent) and the 12 months premium closed at 4.06 per cent (4.03 per cent). State-run banks were seen receiving in the market i.e., selling forward dollars. Dealers speculate that this could be an indication of an impending rate cut in the months ahead.

Bond prices went up by 10-12 paise in the debt market on Monday. The market was seen highly range-bound with most papers staging a price recovery and aligning itself with the cut-off price of Saturday's Open Market Operation (OMO).

The market was very lackadaisical with traded volumes touching Rs 3,400 crore as compared to heated up markets of the previous week which witnessed daily volumes of almost Rs 6,000 crore, said a dealer in a bank.

The cut-off of the 7.40 per cent 2012 paper was fixed at Rs 101.51, which was much lower than expected. Since the cut-off announcement came much after the markets close on Saturday, we saw the impact on Monday, said a dealer.

The 7.40 per cent 2012 paper opened at Rs 101.51 and closed at Rs 101.57. The 9.39 per cent 2011 paper opened at Rs 114.48 and closed at Rs 114.56. The 8.07 per cent 2017 paper opened at Rs 105.12 and closed at Rs 105.22 and the 9.85 per cent 2015 paper opened at Rs 120.40 and closed at Rs 120.53. The call rates closed at 5.70-5.75 per cent with ample liquidity in the system.

In the repo auction, the RBI received 12 bids worth Rs 14,375 crore out of which 12 bids worth Rs 11,500 crore was partially accepted at the repo rate of 5.75 per cent.

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