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MUMBAI: The rupee ended firm against the dollar on Friday. Dollar demand from corporates and importers aborted an early foreign funds led rally in extremely thin and lethargic trade at the forex market.

After opening firm at 45.53/54, the rupee hit the day's high of 45.52/53 in early deals, but a late bout of dollar short-covering by banks pushed it down to 45.5450/5550 at the close, a notch lower from Thursday's close of 45.54/55, dealers said.

G-secs rallied smartly across the spectrum on a fresh round of buying, despite a marginal increase in inflation rates to 5.25 per cent.

Select bonds at the medium to longer end rose by 20-70 paise on renewed demand with the yields falling across the board, dealers said.

Yields on the benchmark 10-year dropped to 5.18 per cent from Thursday's 5.21 per cent with the 7.27 per cent 2013 paper ending at Rs 115.85/90 from Rs 115.55/60. The 9.81 per cent 2013 paper gained over 20 paise at Rs 133.80.

Actively traded 8.07 per cent 2017 security rose by over 40 paise to Rs 122 and the 7.46 per cent 2017 shot up to Rs 117.10 from Thursday's Rs 116.30/40.

The 7.38 per cent 2015 paper surged to Rs 117.25, a steep gain of nearly 60 paise and the 7.49 per cent 2017 gilt gained 40 paise at Rs 116.20/25.

The call rates ended at 4-4.25 per cent.

The RBI accepted all 54 applications for a total sum of Rs 25,540 crore at the three-day repo auction at the cut-off price of 4.50 per cent, under the LAF.

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