The Hindu Business Line : Rupee tad firmer; bond prices up

MUMBAI: The rupee reversed its trend of the last two sessions and appreciated against the dollar on higher inflows on Tuesday. It opened at 43.48 and ended the day at 43.44, up from Monday's close of 43.4750/4825.

Dealers said that the market's sentiment has been towards the appreciation of the rupee. In the forward premia market, the 12-month premium finished lower at 1.40 per cent (1.47) and the 6-month premium closed at 1.62 per cent (1.68).

In the bond market, bond prices inched up as the Government announced the State loan auction of Rs 7,300 crore fixed at a coupon rate of 7.7 per cent. 26 States will be borrowing at this auction, which is to be held on May 17. The market has been edgy for the past few days in anticipation of this announcement.

Dealers said they expected bond prices to see a slight upturn tomorrow. The 7.55-5-year-2010 paper, which is currently active opened at Rs 102.75/76 (6.9 per cent YTM), reached a high of Rs 102.87 (6.86 per cent YTM) and closed at Rs 102.85 (6.87 per cent YTM). On Monday, it had ended at Rs 102.75/78 (6.88 per cent YTM). The 8.07 per cent-12 year-2017 paper opened at Rs 104.65(7.46 per cent YTM),. ended at Rs 104.85 (7.4 per cent YTM), up from Monday's close at Rs 104.58 (7.47 per cent YTM). The7.38-10 year-2015 benchmark paper opened at Rs101.10 (7.22 per cent YTM) and ended at Rs 101.25 (7.20 per cent). Call rates closed at 4.95-5.00 per cent. In the one-day reverse repo under the liquidity adjustment facility, RBI received and accepted 37 bids, amounting to Rs 20,070 crore.The CBLO market saw 171 trades amounting to Rs 7,550.30 crore in the rate range of 4.84-5.00 per cent.

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