The Hindu Business Line : Rupee steadies; gilts volumes up

MUMBAI: The rupee seems to have lost its volatility, with the currency gaining a mere six paise to end the day at 43.67/68 in its value against the dollar on Monday.

It opened at 43.73, touched a high of 43.65/66 and a low of 43.7750.

The dollar inflows seen on Monday were significantly lower than those witnessed last week, and the central bank has also stepped up its absorption, said a dealer in a private bank.

In the forward dollars market, the premia softened by a few basis points, with exporters coming in to sell contracts. The six-month premium closed at 0.56 per cent (0.69 per cent) and the one year closed at 0.47 per cent (0.56 per cent).

Trading volumes gained significantly to Rs 5,900 crore in the government securities market as players were active with the implementation of DVP III.

Another reason for the increased trading is the introduction of the seven-day repo. Banks reluctant to lock in funds for seven days had opted to trade more in g-secs, said dealers. DVP III brings the option of rollover of repos and buy and sale of securities on the same day along with procedural ease.

Players have also started lending more in the call money market. The rates have moved in a wide range of 3-4.35 per cent to close at 3.5 per cent.

Prices moved down by 15-30 paise on the back of the rise in the US yields.

Some indicative papers were the 7.46 per cent 2017 paper which ended at Rs 119.55. On Friday, it closed at Rs 119.85.

The 6.72 per cent 2014 paper closed at Rs 112.05. On Friday, it finished at Rs 112.20. Through the seven-day repo, amounts worth Rs 32,350 crore were absorbed at the repo rate of 4.5 per cent.