The Hindu Business Line : Rupee ends flat; bonds steady

Dealers said the market was very quiet as there was no proper direction. A dealer at a broking firm said that unless the Finance Minister clarified issues regarding the Banking Regulation Act and until an official circular was released about the statutory liquidity ratio, the market would continue to be directionless.

Another reason for the flat market was that March being the financial year-end, banks would not take large positions and would square up their positions.

According to another dealer, though there were good FII inflows, buying by state-run banks absorbed the dollars.

The forward premia market was slightly higher, with the 12-month premium closing at 1.50 (1.04) and the 6-month premium ending at 1.68 per cent (1.60).

The bond market was weak with the 7.38 per cent 10-year benchmark paper closing at Rs 105.60 (6.63 per cent YTM) on Wednesday, unchanged from Tuesday's close. The bond had opened at Rs 105.50 (6.64 per centDealers said the market fell as foreign banks squared up their positions. Two state-run banks were net buyers, dealers added.

In the one-day repo/reverse repo auctions, RBI received and accepted 44 bids worth Rs 44,000. In the CBLO market, 166 trades aggregating Rs 5,489.45 crore were put through in the rate range of 4.00 to 4.75 per cent. Call rates remained between the range of 4.50 - 4.60 per cent.

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