Financial Daily from THE HINDU group of publications
Wednesday, Dec 18, 2002
Financial Daily from THE HINDU group of publications Wednesday, Dec 18, 2002 |
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Money & Banking
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Forex Re edges up; gilts rally Our Bureau
Mumbai: THE rupee closed stronger at 48.1375/1425 against the dollar on Tuesday as compared to Monday's close of 48.1450/1500 in the forex market. There was good supply of the greenback, especially through foreign institutional investors, which saw the currency strengthen, said a forex dealer in a state-run bank. There was some mopping up of dollar inflows by state-run banks, without which, the rupee would have strengthened further. The currency opened at 48.13/14, touched an intra-day high of 48.1250 and an intra-day low of 48.1425 against the dollar. In the forwards market, the premia firmed up a little, due to inter-bank demand, said a forward dealer. The six months premium closed at 3.70 per cent (3.67 per cent) and the one-year premium closed at 3.46 per cent (3.45 per cent). G-sec prices were seen rallying on Tuesday by 30-40 paise in the medium and long-end papers in the debt markets. "It was a liquidity driven rally that was witnessed today,'' said the chief dealer in a private bank. In spite of the advanced tax outflow, which dealers estimate to be anything between Rs 5,000-10,000 crore, the rally in the prices went on unabated. The 8.07 per cent 2017 paper opened at Rs 113.30 and closed higher at Rs 113.62 with a yield of 6.57 per cent. The 10.18 per cent 2026 paper opened at Rs 135.60 and closed at Rs 135.05 with a yield of 7.03 per cent. The call rates closed at 5.50-5.60 per cent in the inter-bank call money market. There was sufficient liquidity in the market, in spite of the advanced tax outflow, said a dealer. In the one-day repo, the RBI received 20 bids worth Rs 10,615 crore, all of which was accepted at the repo rate of 5.50 per cent. The large amounts submitted are a reflection of the `liquidity overhang'.
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