The Hindu Business Line : Rupee weakens; bonds steady

MUMBAI: The rupee lost Tuesday's marginal gains as oil companies bought dollars to meet their import demands. A weak Euro also helped the dollar to gain, said dealers.

The rupee ended trade at 43.7205 on Wednesday against the US currency, lower than Tuesday's close of 43.67/6725. The forward premia closed slightly stronger, with the 12-month premium closing at 1.5 per cent (1.45 per cent) and the 6-month premium at 1.75 per cent (1.65 per cent).

In the bond market the 7.38 per cent, 10-year-2015-benchmark paper ended at Rs 101.95 (7.11 per cent yield to maturity), almost unchanged from Tuesday's close of Rs 101.90 (7.11 per cent YTM). The 8.07 per cent 12-year-2017 paper, which is currently the most actively traded paper, ended at Rs 105 (7.42 per cent YTM), slightly higher than Tuesday's close of Rs 104.97 (7.43 per cent YTM). It had opened at Rs 105 (7.42 per cent YTM).

About market expectations from the monetary policy, a dealer said, "The bond market is not expecting any rate hike. If RBI announces introduction of interest rate futures, it will be viewed as a positive. Then there could be some action."

Call rates were steady between 4.70 and 4.80 per cent (4.78-4.80 per cent).

In the one-day reverse repo, RBI received and accepted 39 bids amounting to Rs 39,625 crore.The CBLO market say 189 trades aggregating Rs 7108.70 crore, in the rate-range of 4.01 to 4.85 per cent.

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