The Hindu Business Line : Rupee tad weaker; bond prices fall

THE rupee closed five paise lower at 45.2850 on Monday with strong intervention by the central bank, said currency dealers. The domestic currency had closed at 45.2300 in its value against the dollar on Friday.

The rupee started the day at 45.2350 touched an intra-day high of 45.2250 and closed at the intra-day low of 45.2850 in a day of uni-directional currency movement.

There was no apparent corporate demand for the dollar, said dealers. It was mainly the Reserve Bank of India, which was seen mopping up dollar supplies at various levels today.

The forwards closed lower from the opening levels. The six months forward premium closed at 0.17 per cent (035 per cent) and the one-year closed at 0.35 per cent (0.40 per cent).

The government security prices were seen falling by 20-50 paise on low volume trading as there were more sellers than buyers in the market.

The ten-year benchmark, 7.37 per cent 2014 paper which closed on Saturday at Rs 116.05 dropped by over 20 paise to end the day at Rs 115.82 which works out to a yield of 5.33 per cent. The 6.25 per cent 2018 paper dropped lower by 45 paise to end the day at Rs 104.15, a yield of 5.81 per cent.

Traded volumes were at a mere Rs 2,700 crore in tune with dull volumes witnessed in recent weeks. Liquidity was abundant with call rates easy at 4.10-4.50 per cent. Surplus funds worth over Rs 33,000 crore were accepted at the repo rate of 4.5 per cent through the LAF window.