The Hindu Business Line : Rupee fall persists; bond prices up

MUMBAI: The rupee continued to slip on Wednesday, as the dollar gained against other Asian currencies and Euro. The rupee opened at 43.54/55 and closed at 43.56/57, lower than Tuesday's close of 43/53/53. According to the dealer with a private bank, the dollar gained against other Asian currencies and also against the Euro. However, the rise of 70 points in the Sensex helped the rupee, he added. The forward premia market saw almost no movement, with the 12-month premium closing at 1.31 per cent (1.31 per cent) and the six-month premium closed at 1.45 per cent (1.44 per cent).

The bond market was upbeat on rumours that the Rs 10,000-crore auction may be cancelled, said a primary dealer. "Liquidity has become slightly tight. But there are rumours that the Government has Rs 20,000 crore surplus funds because of tax collection. So the chances that the auction of the Rs 10,000-crore government paper getting cancelled seem brighter," he said. Dealers also said the price of crude oil easing and the falling of US yields were `feel good' factors.

A rate hike in the Federal Open Market Committee (FOMC) meeting on Thursday has been discounted for. The tone of Mr Greenspan, Chairman, US Federal Reserve, will be the focus of attention. The 8.07-12 year-2017 paper opened at Rs 108.90 (6.93 per cent YTM) and closed at Rs 109.15 (6.91 per cent YTM). The 7.38-10 year-2015 paper was dealt at Rs 103.60 (6.88 per cent YTM), up from Tuesday's Rs 103.50 (6.89 per cent YTM).

The call rate closed at 5.75-5.5 per cent (5.5). In the one-day reverse repo auction under the liquidity adjustment facility, the RBI received and accepted 13 bids amounting to Rs 5,760 crore. The CBLO market saw 190 trades being put through in the rate range of 5.10 per cent to 5.98 per cent, aggregating to Rs 6,556.25 crore.

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