Financial Daily from THE HINDU group of publications
Tuesday, May 03, 2005
Financial Daily from THE HINDU group of publications Tuesday, May 03, 2005 |
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Money & Banking
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Forex Rupee weakens; bonds steady Our Bureau
MUMBAI: The rupee weakened against the greenback on Monday and ended at 43.5750/58 as importers bought dollars to cover their positions. The rupee had closed at 43.54/55 on Friday. The rupee opened at 43.55/56, inched down to 43.61 and then bounced back. Dealers said the US Federal Open Market Committee (FOMC) which meets on Tuesday is likely to make an announcement of a further quarter percentage hike in interest rate from the current 2.75 per cent. The euro dipped to $1.287 and the dollar was higher against the yen. These factors had an impact on the Indian currency, said a forex dealer. Dealers said globally, there was dollar buying and selling of the yen. According to a dealer at a private bank, "In India, importers have been buying dollars for their cash remittances as well as booking forwards. They are cashing in on the gains the rupee has been seeing since Friday." The price of crude, which was lower at $ 49.07 per barrel, prevented the rupee from depreciating beyond 43.61, said dealers. In the forward premia market, the 12-month premium closed at 1.53 per cent and the six-month premium closed at 1.80 per cent. In the bond market, prices opened at the same level as at the Saturday closing. The prices fell by 10 to 15 paise and then recovered towards the close of the day. The market is awaiting the Rs 8,000 crore-auction on Tuesday. The RBI announcement of a lower cut-off in the underwriting commission (13 paise) for the 7.55 per cent-5 year-2010 bond on Monday signified the apex bank's confidence of market participation in the auction. The market expectation of the commission was 20-25 paise, said a dealer. The FOMC meeting is also causing market jitters, said dealers. The currently active 8.07-12 year-2017 bond opened at Rs 103.65/75 (7.58 per cent YTM), hit an intra-day low Rs 103.60 (7.60 YTM) and finally closed higher at Rs 104 (7.54 per cent YTM). The 7.55 per cent-5 year-2010 bond, which will be auctioned on Tuesday, opened at Rs 102.70 (6.90 per cent YTM) and closed at Rs 102.60 (6.93 per cent YTM). The 7.38-10-year-2015 benchmark paper closed at Rs 100.60 (7.294 per cent YTM), up from Saturday's close at Rs 100 (7.38 per cent YTM). Call rates ruled higher in the 5.00-5.05 per cent range. In the one-day reverse repo market, under the liquidity adjustment facility, RBI received and accepted 42 bids amounting to Rs 32,900 crore. The CBLO market saw 177 trades aggregating Rs 6,601.20 crore in the rate-range of 4.71 to 4.90 per cent.
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