The Hindu Business Line : Forwards dive; gilts firmer

MUMBAI: Forward premia, which were trading at a discount over the past couple of weeks, slipped into deeper discount on Thursday even as the spot rupee closed around seven paise weaker.

Dealers ascribed ``excessive buy sell swaps'' along with a sizeable amount of corporate selling in the forwards as factors that drove the premia into deeper discounts.

The one-month premium closed at - 3.49 per cent (-3.33 per cent), three months ended at - 1.67 per cent (-1.41 per cent), six months at - 0.77 per cent (-0.68 per cent) and the one-year premium ended at - 0.39 per cent (-0.31 per cent).

The spot rupee ended at 44.1550 on Thursday, weaker than its previous closing at 44.06/07.

After opening the day at 44.05/08, the rupee appreciated to 43.98 due to good dollar inflows and some amount of dollar selling by banks. Subsequently, a sizable amount of dollar buying by a leading oil major, brought the rupee back to its closing levels, dealers said.

Bond prices gained between 3-20 paise across maturities in the government securities market .

There was some amount of buying interest in the securities probably on expectation of a lower inflation figure on Friday, dealers said. "The market had slipped by about 20-25 paise following statements made by Mr Alan Greenspan recently. But our economy has so much liquidity that will support the current yield levels, despite global interest rates hardening," said a dealer with a private sector bank.

The 7.37 per cent 2014 paper ended at Rs 117.87/89 as against its previous close at Rs 117.86, 8.07 per cent 2017 paper at Rs 125.33/35 (Rs 125.30), 6.25 per cent 2018 paper at Rs 108.39 (Rs 108.25) and the 6.05 per cent 2019 paper closed at Rs 106.19 (Rs 106.37). Call rate closed slightly higher at 4.50 per cent.In the seven-day repo under LAF, RBI received and accepted 41 bids amounting to Rs 12,580 crore at the rate of 4.50 per cent.