The Hindu Business Line : Rupee firmer; bonds decline

MUMBAI: The rupee closed on Monday at 45.635/645 against the dollar, as against its previous close of 45.73 per dollar on Thursday. Dealers said the domestic currency touched its four-month high on Monday. The rupee had witnessed a level of 45.665/680 per dollar on June 18.

The currency ruled stronger — backed by the weakness of the dollar overseas and substantial dollar selling, said dealers. Foreign banks were actively supplying greenbacks in the market. Export remittance and foreign institutional investor inflows also improved the dollar supply.

Forwards moved downward as the six-month forward closed at 2.60 per cent (2.68 per cent) and the twelve-month forward finished at 2.05 per cent (2.15 per cent).

Bond prices moved down by about 45 paise across maturities, after opening higher as traders rushed in for profit booking in a volatile market, said dealers. The 10-year benchmark 7.37 per cent 2014 paper closed lower by nearly 60 paise at Rs 104.60 at a yield of 6.65 per cent. The 11-year benchmark 7.38 per cent 2015 paper finished 40 paise, lower than the opening level at Rs 105.40 at a yield of 6.68 per cent.

Call rates remained in a tight range of 4.75 per cent-4.90 per cent with liquidity showing signs of drying up.

Under the liquidity adjustment fund (LAF) window, RBI mopped up Rs 400 crore by way of two bids in the seven-day repo and absorbed Rs 4,245 crore through 10 bids in the one-day repo. In the CBLO market, 143 trades worth Rs 4,660.65 crore were transacted in the rate range of 4.50-5.00 per cent.