The Hindu Business Line : Rupee up 4 paise; securities weak

The gain is after a gap of nearly a week. The market demand was rather limited on account of month beginning, said dealers. The RBI intervened in the early deals and exited at 45.41 levels. Inter-bank demand, purchase from oil companies, mainly from IOC to the tune of $20-25 million drove the market. On the supply front non-deliverable funds (NDFs) were active, selling in spot and covering forwards. However, this did not lead to rupee appreciation, but it did put pressure on forwards, said a senior analyst of a risk management firm. Stronger level of rupee is expected at 45.38/35 on Wednesday, said market sources.

The intra-day low of the rupee was 45.4675 and the high was 45.40.

In the forwards market, reversing the trend of about two years, importer covering exceeded exporter hedging. The six-month forward closed at - 0.09 per cent ( - 0.13 per cent) and the one-year forward closed at 0.15 per cent (1.20 per cent).

The bond market opened flat but went up by 10-30 paise during the early hours only to close at lower levels. The 8.07 per cent 2017 paper opened at Rs 121.60. It was dealt up to Rs 121.90 and closed at Rs 121.50 with a corresponding yield of 5.65 per cent.

The 7.37 per cent 2014 paper opened at Rs 115.95, got dealt up to Rs 116.05 and closed lower at Rs 115.80/85 with an yield of 5.29 per cent. The 7.46 per cent 2017 paper opened at Rs 116.45 and closed 10 paise lower.

According to dealers, the market was lacklustre due to concerns on the liquidity and the inflation front. The Rs 10,000 crore auction on June 3 is expected to take a toll on liquidity. There were no buyers in the market.

The call rates remained at 4.25-4.50 per cent. Through the seven-day repo, the RBI accepted funds to the tune of 13,000 crore by ways of 42 bids.