Financial Daily from THE HINDU group of publications
Tuesday, Oct 22, 2002

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Rupee up 4 paise; gilts weak

Our Bureau


THE rupee closed almost 4 paise firmer on Monday at 48.35/3550 against the dollar as compared to its previous close of 48.3950/4000.

The supply of the dollar bunched up over the weekend is believed to have to propped up the rupee, said a forex dealer.

"The corporate dollar demand fizzled off over the weekend, helping the rupee appreciate on Monday,'' the dealer added.

The forex market was observed to be quiet on Monday, with low demand for the greenback. The market is expecting month-end demand for the dollar.

All eyes of market players are on the Credit and Monetary Policy on October 29 with a wait and watch approach.

The domestic currency opened at 48.37, touched an intra-day high of 48.35 and an intra-day low of 48.3750 against the dollar.

The forwards market was seen to be dull, with the six months premium closing at 3.79 per cent (3.85 per cent) and the twelve months premium at 3.82 per cent (3.92 per cent).

Bond prices were seen falling on Monday by 5-10 paise from opening levels in the G-secs market.

Market players were seen partially unwinding from their positions in order to salvage themselves from a severe bashing in case their rate cut expectations are not met in the credit policy, said a money market dealer.

Dealers contend that profit-booking is responsible for the fall in prices witnessed on Monday.

"Market players were seen selling the stock built up over the last week. Players become jittery in the run up to the credit policy,'' said a dealer in a primary dealer.

The 11.03 per cent 2012 paper opened at Rs 127.35/40 and closed at Rs 127.30. The 9.85 per cent 2015 paper opened at Rs 121.65 and closed at Rs 121.57/60. The 7.46 per cent 2017 paper opened at Rs 101.35 and closed at Rs 101.30.

In the inter-bank call money market, the call rates closed at 5.65-5.75 per cent with liquidity ample.

In the one-day repo auction, the Reserve Bank of India received 12 bids worth Rs 13,025 crore out of which 12 bids worth Rs 9,119 crore was partially accepted at the repo rate of 5.75 per cent.

In the fortnightly 11-day repo, the central bank received 7 bids worth Rs 13,820 crore out of which 7 bids worth Rs 6,910 crore was partially accepted at the repo rate.

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