The Hindu Business Line : Rupee breaches 44; bonds subdued

Dealers said the rupee's decline was on account of factors such as the strengthening of the greenback against the euro and possible FII outflows from the equities market.

After opening weaker at 44 levels, the rupee touched an intra-day low of 44.08/09 after which it scrambled back to its closing.

"It was a bit of a surprise that the rupee closed at a higher level, after going down to below 44," said a dealer with a private sector bank.

The rupee recovered from its lows, on a good bout of dollar selling by market participants across the board, he said.

Meanwhile, in the forwards market, the six months forward closed at 2.05 per cent, while the one-year premium closed at 1.61 per cent.

Bond prices remained bogged down by the pressures of a declining rupee and a fall in the domestic equities market.

The 10-year benchmark paper — the 7:38 per cent 2015 paper closed at Rs 106 at a yield to maturity of 6.55 per cent, around 15 paise lower from its previous levels.

Call rates inched up to 4.85 per cent levels in the inter-bank market, on apprehensions of tightening liquidity conditions. In the one-day repo under the LAF, the RBI received and accepted 33 bids amounting to Rs 10,050 crore at the rate of 4.75 per cent.

In the CBLO market, 129 trades were conducted for an amount of Rs 4,271.50 crore in the rate range of 4.6 per cent to 5 per cent.

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