Financial Daily from THE HINDU group of publications
Tuesday, Mar 18, 2003

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Re stable; gilts recover

Our Bureau

Mumbai: THE rupee ended steady on Monday at 47.6600/6700 against the dollar as compared to its previous close of 47.6550/6600 in the forex markets.

The domestic currency opened at 47.6650/6700 and went as low as 47.6900 due to dollar demand by corporates across the board, said a forex dealer.

The rupee was for most part of the day trading at 47.6575/6600 levels.

"The bunched-up dollar supplies was sufficient to meet the demand of corporates; therefore the rupee remained in a narrow band of activity,'' said the chief dealer in a public sector bank. Despite heightening war tensions in West Asia, there was little impact on the currency markets, conceded forex dealers.

In the forwards market, there was little activity with premia almost unchanged from previous levels. The six months premium closed at 3.65 per cent (3.64 per cent) and the one-year was at 3.46 per cent (3.44 per cent).

G-sec prices tumbled down by up to Rs 0.50-1.50 on war fears, but recovered later in the day on the back of buying interest by traders.

Traded volumes were as low as Rs 1,600 crore with Mr George Bush issuing ballistic statements and news reports of evacuations in Kuwait.

With the uncertainty of war looming, pricing papers had become difficult and players were wary of trading, said a dealer in a primary dealer. The 7.40 per cent 2012 paper opened at Rs 107 and fell as low as Rs 106.50 and later firmed to Rs 106.75 with a yield of 6.41 per cent. The ten-year benchmark, 9.81 per cent 2013 paper closed at Rs 124.80 with a yield of 6.45 per cent. It previously closed at Rs 125.50.

Liquidity was tight in the call markets.

Call rates ended at 5.30-5.50 per cent.

Through the LAF window, RBI accepted bids worth Rs 2,300 crore at the repo rate of 5 per cent.

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