The Hindu Business Line : Rupee down 12 paise, gilts firmer

MUMBAI: The domestic currency closed at 45.95/97 on Monday, weaker by 12 paise than the previous close on Friday. In the last trading session rupee had closed at 45.83/84.

From the opening levels of 45.83/85,the rupee fell during the day. Public sector banks were buying dollars during intra-day when it was cheaper and selling when it was profitable, dealers said.

Towards closing hours, good demand for the domestic currency was observed at the levels of 45.95 against the dollar.

The forwards continue to remain firmly into premium, with the December rupee forward closing at 1.56 per cent against the previous close of 1.45 per cent. The June forward closed at 1.29 per cent against 1.20 per cent on Friday.

Bond prices across maturities recovered during the day by up to 80 paise higher than the levels in the previous trading session.

Mutual funds evinced a significant amount of buying interest in the market, dealers said.

The ten-year benchmark had an upward movement of about 40 paise with the yield softening by around 7 to 8 basis points at 5.79 per cent, lower from the previous 13-month high of 5.86 per cent. Over last week the yield of the ten-year benchmark had risen about 40 basis points on fears of an interest rate hike by the RBI.

The 8.07 per cent 2017 paper opened at Rs 116.05 moved up during the day to Rs 116.85/90 before closing higher that the opening levels at Rs 116.65.

The shorter tenor papers went up by about 50 paise, while the medium to long tenor papers had a 75 to 80 paise upward movement, according to bond dealers.

Call rates ended steady at 4.25 to 4.50 per cent. Under the Liquidity Adjustment Facility (LAF), the RBI received 44 bids for the seven-day repo, which were fully accepted for the amount of Rs 20,825 crore. Under the fortnightly repo, seven bids were received and accepted at the repo rate of 4.5 per cent worth Rs 3,295 crore.