The Hindu Business Line : Rupee stronger; bond prices crash

MUMBAI: The rupee closed stronger at 45.3050/31 per dollar on Thursday, in a supply driven forex market against Wednesday's close at 45.3450/3500.

Dealers said that the apex bank was conspicuous by its `non-intervention' in the market.

Forwards eased considerably in both the six-month and one-year segments, the premia for which ended at 0.45 per cent (1.13 per cent) and 0.70 per cent (0.91 per cent), respectively.

Bond prices crashed by over 50-60 paise across some maturities in a bearish government securities market.

The 8.07 per cent 2017 paper opened at Rs 123.54, lower than Wednesday's closing at Rs 123.60. The paper got dealt to a low of Rs 123.05/10 before recovering to settle at around the Rs 123.35 levels.

Similarly, the 7.40 per cent 2012 paper opened at Rs 115.20 and got dealt to a low of Rs 114.80 before closing at Rs 114.95. The 7.46 per cent 2017 paper opened at Rs 118.60, dipped to a low of Rs 117.98 before clawing back to Rs 118.30 at close.

Dealers said the market was reacting to RBI's Currency and Finance Report 2002-03, which indicated that inflation was unlikely to go down to 4-4.5 per cent, as was earlier forecast.

Call rates remained steady at 4.20 per cent levels in the inter-bank market.

In the one-day repo under LAF, RBI received and accepted 53 bids, amounting Rs 37,260 crore at the rate of 4.50 per cent.