The Hindu Business Line : Rupee steady; bonds rally

MUMBAI: The rupee held steady on Tuesday with almost nil movement. The currency opened and closed 45.29/30 in its value against the dollar, at the same level as on Friday.

"Although there were fresh dollar supplies the domestic currency did not shift since the central bank was active in absorption of greenbacks in the market," said a dealer in a private sector bank.

In the forwards market, premia at the longer end fell drastically by about 15 basis points.

The six months forward closed at 0.90 per cent (1.07 per cent) and the one-year closed at 0.75 per cent (0.89 per cent).

Bond prices rallied by over 50 paise in longer-term maturities in active trade in the government securities market.

The 8.07 per cent 2017 opened at Rs 122.70/75 and got dealt upto Rs 123.30, while the 7.46 per cent 2017 opened at Rs 117.65 and got dealt upto Rs 118.25.

Dealers said market sentiment was upbeat on account of the lower borrowing target and lower fiscal deficit as a percentage of the GDP, announced in the interim Budget.

"The short-term outlook is bullish for the market. But one has to wait and watch as to how things will pan out in the long term", said a dealer with a private sector bank.

Call rates remained steady at 4.50 levels in the inter-bank market. In the one-day repo under LAF, RBI received and accepted 60 bids amounting to Rs 40,735 crore at the rate of 4.50 per cent.