The Hindu Business Line : Rupee sheds 8 paise; g-secs weak

MUMBAI: The rupee closed weaker against the dollar at 43.74/75 on Tuesday on renewed interest in the US currency. The rupee had ended on Monday at 43.66/68 levels.

According to a dealer at a private bank here, the firm trend in dollar/rupee trade mirrored the dollar's firm tone against other currencies such as the pound and the yen. "The dollar-rupee was stuck at 43.74/75 levels for most part of the day. The dollar's firm trend can be attributed to buying support, which saw it hit a high of 1.8527 against the pound and 102.75 versus the Japanese yen," the dealer said.

The forwards market also showed a firm trend with the six-month forward closing at 2.30 per cent as against Monday's close of 2.14 per cent and the 12-month forward at 1.85 per cent (1.65 per cent).

Sentiment in the bond market remained weak with oil prices again on the uptrend. The benchmark 7.38 per cent paper closed at 6.72 per cent.

"The outlook is bearish as oil is ruling higher and with the US deficit at record highs, the Fed is likely to hike rates, probably in February," said a dealer.

Call rates ruled steady at 4.70/75 levels, similar to their overnight close. According to the dealer, though market players were found covering for the reporting Friday, which is a holiday, supplies were sufficient to keep call rates steady. The repo base was at Rs 19,890 crore, indicative of a liquid market. In the CBLO market, 147 trades were conducted with volumes at Rs 5,853.60 crore in the rate range of 4.5-4.85 per cent.

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