The Hindu Business Line : Rupee range-bound; G-secs trend lower

MUMBAI: The rupee traded in a narrow range of four paise against the dollar in the forex market on Wednesday on thin volumes. The domestic currency closed at 45.5900/5950 three paise weaker than Tuesday's close of 45.5600 in its value against the dollar.

Nationalised banks were seen buying dollars taking the rupee to its intra-day low of 45.59. The RBI was seen in parts sucking away dollar liquidity, said forex dealers. For most of the trading session the currency remained at the band of 45.5800-45.5900.

In the forwards market, the premia were steady in the longer term. The six months premium closed at 0.03 per cent (0.02 per cent) and the one-year closed at 0.16 per cent (0.19 per cent).

With the unexpected OMO announcement last evening, G-sec prices fell by 30-70 paise depending on the maturity compared to Tuesday's closing levels.

Some indicative papers were the 7.46 per cent 2017 paper, which closed today at Rs 118.70 down from Tuesday's close of Rs 119.00. The 6.01 per cent 2028 paper today ended at Rs 100.20 (100.90).

It is expected that provident funds will invest the interest payment by the Government of India in the auction and the OMO both of which are to be held in the first week of January. Traded volumes were at Rs 3,776 crore today.

Though the LAF window, RBI accepted 46 bids worth Rs 26,995 crore at the repo rate of 4.5 per cent.