The Hindu Business Line : Dull trading in bond, forex markets

MUMBAI: Trading in the domestic forex and debt markets remained lacklustre on Thursday, with most market players watching from sidelines ahead of the inflation announcement on Friday.

Bond prices opened weak but recovered ground towards close, while the spot rupee closed around five paise stronger.

Some bond dealers are understood to be punting on the expectation of a lower inflation rate to be announced on Friday.

The 10-year benchmark paper, the 7.37 per cent 2014 closed stronger at Rs 106.15, at an improved yield of 6.50 per cent from its previous closing yield to maturity levels at 6.53 per cent. The 7.38 per cent 2015 paper also closed at Rs 106.25 levels, slightly improved from its previous close at Rs 106.

Call rates eased to 1.50 per cent-2.00 per cent levels in the inter-bank market due to ample liquidity and few borrowers.

"Tomorrow is a bank holiday and today is the last day of the fortnight. Rather than keep the funds, banks would be willing to lend at any rate," said a dealer.

The CBLO market saw 90 trades worth Rs 2019.50 crore conducted on Thursday.

In the seven-day repo under the LAF, the RBI received and accepted 5 bids amounting to Rs 580 crore at the rate of 4.50 per cent, while the in the four-day repo 40 bids were accepted for Rs 19,455 crore at the rate of 6 per cent.

In the forex market, the spot rupee ended stronger at 46.32/33 as against its previous closing at 46.35/37, buoyed by good dollar supplies.

In the forwards market, the six-month premium ended at 2.80 per cent (2.74 per cent), while the premium for one year ended at 2.46 per cent (2.42 per cent).