The Hindu Business Line : Rupee down 10 paise; gilts rise

MUMBAI: For the first time in over a fortnight, a good amount of dollar buying led to the rupee closing weaker by almost 10 paise on Friday, at 43.7350/7450 per dollar, against its previous closing levels on Wednesday, at 43.60/65.

The forex market remained closed on Thursday due to the yearly closure of accounts.

Dealers said State-run banks, importers and foreign banks were all seen mopping up dollars. "It could be the usual month-end demand which may have been bunched up as Thursday was a holiday, and so is Saturday," said a dealer.

After opening at 43.35/40, the domestic currency firmed up to 43.30 levels, before slipping again to end at its closing levels on the back of substantial amount of demand for the greenback.

Meanwhile, in the forwards market, the six-month premium closed at 0.70 per cent (0.85 per cent) while the one-year premium closed at 0.55 per cent (0.68 per cent).

Bond prices were up by 30-40 paise across maturities amid good liquidity and positive sentiment in the government securities market on Friday.

The 7.46 per cent 2017 paper opened at Rs 119.56/57 and got dealt up to Rs 119.87. The 8.07 per cent 2017 opened at Rs 124.67 and got traded up to Rs 124.95. The 7.37 per cent 2014 opened at Rs 117.43/48 and got dealt up to Rs 117.55/60 at the rate of 5.11 per cent.

Dealers said that despite the fact that the market expected stabilisation bonds to mop up liquidity anytime now, the mood was upbeat as the fundamentals remained positive, including a lower inflation figure at 4.30 per cent.

Call rates remained easy at the 4.25-per cent levels in the interbank market.

In the three-day repo under LAF, RBI received and accepted 51 bids, amounting to Rs 44,830 at the rate of 4.50 per cent.