The Hindu Business Line : Rupee firms up; gilts retreat

MUMBAI: The rupee closed at 45.26 per dollar, marginally stronger than its previous close at 45.2875/2925 on Tuesday. Forex markets remained closed on Wednesday on account of a public holiday.

After opening at 45.2650 per dollar, the domestic currency slipped to an intra-day low of 45.31 on genuine corporate demand for the greenback. Dealers said the demand was offset by the steady spate of dollar inflows,taking the rupee to touch a high of 45.2450. At this point, state-run banks started buying dollars again, taking the rupee back to its closing levels.

Meanwhile, in the forward market, the premia inched up slightly, with the six-month premium closing at 0.25 per cent (0.09 per cent) and the one-year premium ending at 0.40 per cent (0.29 per cent).

Bond prices fell by around 20 paise - 35 paise across maturities in the Government securities market. However, according to dealers, the mood is still upbeat on account of good liquidity, which is offsetting few negative factors.

The 7.40-per cent 2012 opened at Rs 114 and ended at Rs 113.80. The 8.07-per cent 2017 opened at Rs 122 and got dealt lower at Rs 121.65.

Dealers said signs of credit offtake and concerns over a higher inflation continued to be negative factors for the market. However, most players are holding their positions and offering support at these levels, as far as possible.

Meanwhile, call rates closed at 4.25 per cent levels in the inter-bank market. In the one-day repo, under LAF, the RBI received and accepted 66 bids amounting to Rs 41,075 crore at the rate of 4.50 per cent.