The Hindu Business Line : Rupee firm; bond yields move up

MUMBAI: The spot market opened the week on a bullish note on expectations that the Government would allow PF funds to enter the stock markets. The rupee also got a boost on news of the slight easing of oil prices.

Buoyed by these factors, the rupee opened stronger at 43.66 before slipping on month-end dollar demand later in the day. It dropped to 43.74 levels, before closing the session at 43.72. The rupee had ended the previous session at 43.72/72.5 levels.

According to a forex dealer in a private bank here, the spot rupee movements would be dictated by a slew of events scheduled for the week, including the FOMC meet, the non-farm payroll numbers, as well as the G-7 meet later in the week.

The forwards market eased marginally, taking the cue from the rupee's early gains. The six-month forward opened at 2.25 per cent and closed at 2.12 per cent. It had finished the previous session at 2.29 per cent. The 12-month forward also closed easier at 1.79 per cent (1.89 per cent), after opening the session at 1.86 per cent.

The debt market cheered up on the easing of inflation rate and oil prices. Yields hit two-week highs, gaining by 4-50 paise across maturities.

The benchmark 7.38 per cent paper dealt up to 6.6986 per cent as against the previous close of 6.70 per cent.

The call money market closed steady at 4.75 per cent levels as compared to the previous close of 4.70-4.80 per cent. There was adequate liquidity in the market, with Rs 20,000 crore being put through in the repo market.

In the CBLO market, 155 trades were put through in the rate range of 4.30 per cent-4.75 per cent, accounting for volumes of Rs 5,904.75 crore.

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