The Hindu Business Line : Rupee volatile; gilts range-bound

MUMBAI: The rupee saw much volatility on Tuesday with 15 paise movement intra-day. It ended the day seven paise higher at 45.56 in its value against the dollar compared to Monday's close of 45.6450/65.

The currency opened the day at 45.63/65, touched an intra-day low of 45.71 on buying by foreign banks on thin volumes. In the latter half of the trading day, good supplies helped perch up the rupee to close at the intra-day high of 45.56.

The RBI was not very active in the market, said a forex dealer in a private bank.

In the forwards market, premia shot up on profit booking by banks. The six months forward closed at 0.02 per cent (-0.09 per cent) and the one-year closed at 0.19 per cent (0.17 per cent).

The Government securities were seen range-bound with a slip of 10-15 paise.

Some indicative papers were the 8.07 per cent 2017 paper that closed at Rs 124.20/25 and a yield of 5.45 per cent after touching a low of Rs 124.10.

The 7.27 per cent 2013 paper closed at Rs 115.35 and a yield of 5.25 per cent after touching a low of Rs 115.25.

Volumes were not high at about Rs 3,500-4,000 crore. Foreign banks that have been in the sidelines for over a month are expected to emerge as net buyers in the coming year.

Through the LAF window, the Central bank accepted 51 bids worth Rs 29,595 crore at the repo rate of 4.5 per cent.

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