The Hindu Business Line : Rupee up 15 paise; securities recover

MUMBAI: The rupee closed 15 paise stronger on Friday at 45.95 per dollar on the back of an aggressive bout of intervention by the RBI, according to dealers.

On Thursday, the domestic currency ended at 46.1050/1100. In the early trading hours, inter-bank play moved the domestic currency downwards from the opening levels at 46.15/17, said dealers.

A good amount of dollar buying across the board took the rupee down to as low as 46.27. At these levels, State-run banks sold dollars, possibly at the behest of RBI, dealers said.

Towards fag end of the trading hours, the traders started cancelling positions build up for non-deliverable forwards trade, on observing appreciation in the rupee, said a dealer.

Forwards closed lower from Thursday's levels though they had risen during the day. The six-month forward closed at 1.65 per cent (1.84 per cent) and the one-year forward closed at 1.50 per cent (1.61 per cent).

Bond prices recovered on lower than expected levels of inflation figures released on Friday. However, the bearish sentiment of the market did not sustain the early rally.

There was some marginal recovery in bond prices towards the fag end of trading hours, said dealers.

"The traders in the market are refusing to take positions as inflation is considered to be under pressure for the next two weeks," said a senior bond trader. The 10-year benchmark 7.37 per cent 2014 paper opened at Rs 110.25, went down to Rs 110.10, before closing higher at Rs 110.30. The yield on the 10-year paper had touched 5.99 per cent during the day, but recovered to end at 5.96 per cent. The most actively traded 11-year benchmark 7.38 per cent 2015 paper closed about five paise higher than the opening at Rs 110.35.Market participants expect clarity on the turnover tax issue by Monday, which is likely to be instrumental in controlling the market volatility, said a bond trader.

Call rates were easy at 4.25-4.35 per cent. Under the LAF window, the RBI received and accepted 37 bids worth Rs 10,415 crore.