The Hindu Business Line : Marginal rise in rupee; bond prices gain

MUMBAI: The rupee touched a low of 45.9450 but closed a shade higher at 45.90/91 against the dollar on Friday. The currency was marginally changed from previous close at 45.92 per dollar.

The rupee edged down from morning levels of 45.9250 on account of month end demand for dollars from oil importers as well as from public sector units.

"Bids for outward remittances for loan and interest payments were received from PSUs which drove the rupee down," said a dealer of a large private sector bank. Late afternoon saw some amount of greenback selling by state run banks and a few forward contract cancellations, which propped up the Indian currency, dealers said.

Forwards were range bound as they inched up marginally as the six-month forward closed at 1.82 per cent (1.81 per cent). The 12-month forward finished at 1.54 per cent (1.52 per cent).

Bond prices rallied in the morning by nearly 30 paise but settled to close 10 paise higher than previous close, dealers said. Although inflation in the year to September 11 rose to 7.87 per cent, lower than market expectations of 7.92 per cent it failed to perk up prices.

The 11-year benchmark 7.38 per cent 2015 per cent paper was dealt up to Rs 110.45 but closed at Rs 110.25 at a yield of 6.08 per cent. The 10-year benchmark 7.37 per cent 2014 paper closed at Rs 109.60 at a yield of 6.04 per cent lower than previous yield of 6.05 per cent. A statement from the Finance Secretary, Mr D.C. Gupta, saying Indian interest rates are not linked to Fed rates, lifted sentiment, dealers said. Prices are likely to firm up in the next trading session, they said.

Call rates were in the range of 4.50- 4.60 per cent, while under LAF RBI accepted all 27 bids worth Rs 11,015 crore in the 3-day repo auction. In the 7-day repo auction, all 10 bids worth Rs 1,845 crore were accepted. In the CBLO market, 118 trades were transacted worth Rs 3,113.10 crore in the rate range of 4.45-4.75 per cent.