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Our Bureau

MUMBAI: The rupee showed signs of revival on Wednesday as it closed at 45.72/77 against the greenback.

It was up 53 paise from the eleven-month low of 46.25/26, at which it had closed on Tuesday.

Dollar selling by State-run banks, possibly on behalf of the central bank, enabled the rupee recover.

Public sector banks sold the greenback at 46.30 levels to bring it to 45.98 levels.

Rupee's revival also led to a shrinking in spreads between the Indian and the non-deliverable forwards market (NDF), which has been providing an arbitrage opportunity over the past few days on account of the weakness in the dollar overseas, while it gained strength here.

The rupee, which had slipped to 45.90 levels during the day, recovered around 18 paise to settle at its closing levels, in the last half hour of the trading hours on account of some inter-bank deals, said dealers.

In the forwards market, the premia were softer. The six-month forward closed at 1.15 per cent (1.40 per cent), while the one-year forward closed at 0.91/93 per cent (1.10 per cent).

Bond prices recovered by 80 paise to over one rupee in some maturities with the cut off price on the Treasury bill auction exceeding market expectations.

The rupee recovery also helped buoy market sentiment, said dealers. The 8.07 per cent 2017 paper opened at Rs 116.70 and closed higher at Rs 117.75/ 118. Call rates were stable at 4.25-4.50 per cent.

In the 364-day Treasury bills auction, 28 bids worth Rs 1,230 crore were accepted at the cut off price of Rs 95.57. In the 91-day Treasury bill auction, two bids worth Rs 2,000 crore were accepted at the cut off price of Rs 98.90.

Meanwhile, under the LAF window, the RBI received and accepted 35 bids worth Rs 9,185 crore.

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