The Hindu Business Line : Rupee slips

There was heavy demand from importers and corporates as market players were squaring up their positions with no one willing to go short on the dollar. Dollars were being supplied into the market, perhaps at the behest of the central bank, dealers said.

The rupee touched an intra-day high of 45.36 per dollar as against the low of 45.57. Heavy selling pressure from banks and corporates was observed at 45.50 levels, which made it appreciate to 45.36/37 levels.

In the forwards market, discounts narrowed and dealers expect by next week the forwards might come into premium.

The six-month forward closed at - 0.46 per cent ( - 0.58 per cent), and the one-year forward closed at - 0.10 per cent ( - 0.12 per cent).

The bond market opened 5-6 paise higher but went down gradually as minimal buying was observed.

"The market outlook is bearish, as the players expect to see selling pressure in the long tenor securities in the near term. They expect the yields to go up with the steepening of the yield curve as a neutral to upward bias is expected in interest rates", said Mr Akshat Lakhera, Interest rate trader, HDFC Bank.

The benchmark 8.07 per cent 2017 paper showed a decline. It opened at Rs 123.10 and closed at Rs 122.82/85. The 7.37 per cent 2014 paper was hardly traded but it fell 20 paise to Rs 116.50. The 7.46 per cent 2017 paper opened at Rs 118.10 and closed at Rs 117.75.

The call rates remained steady at 4-4.25 per cent. In the seven-day repo under the LAF window, the RBI received 32 bids amounting to Rs 8,945 crore which were fully accepted at the repo rate of 4.50 per cent.