The Hindu Business Line : Rupee forwards go into discount

Forward premium for the first three months went into discount; one-month annualised premium ended at - 0.07 per cent (1.09 per cent) while the two month premium closed at - 0.40 per cent (1.14 per cent). Dealers said exporters were actively receiving forward premium even as movements in the spot market dominated the forward market.

Six-month forward premium fell by 70 basis points from previous closing level to finish at 0.40 per cent. The twelve-month ended at 0.45 per cent (0.95 per cent).

Meanwhile, in a choppy foreign exchange market the rupee strengthened to breach 45 levels yet again; it weakened slightly towards close. The currency closed at 45.0300/0350 against the US currency against the previous finish of 45.0650/0750.

Although substantial foreign inflows to the tune of $600-700 million are seen per day, heavy dollar buying by state run banks, perhaps at the behest of the central bank, is keeping the currency from breaching the 45 level, they added.

"In the next 15 days the rupee might appreciate to 44.75 levels," said a dealer at a state run bank.

In the bond market, lacklustre trading saw the prices falling steadily throughout the day. Towards the later hours, buying of securities by a large insurance company led to slight improvement in prices, dealers said.

The 11-year benchmark 7.38 per cent 2015 paper closed at Rs 101.40 at a yield of 7.19 per cent after its yield had risen to 7.24 per cent intra-day. The 7.55 per cent 2010 paper closed at Rs 102.88, lower by over 15 paise than previous closing levels.

The overnight call rates were in a range of 4.75-4.80 per cent. Under the LAF window RBI accepted all 29 bids aggregating to Rs 5,825 crore in the 4 day reverse repo.

In the CBLO market 180 trades worth Rs 5668.15 crore were transacted in the rate range of 2.00-5.25 per cent.