The Hindu Business Line : Rupee weakens; bonds move lower

MUMBAI: The rupee further depreciated against the dollar on Tuesday on account of importer-related demand and reduced foreign institutional inflows into the equity markets.

The domestic currency opened at 43.64/65 and touched an intra-day low of 43.70. It then trimmed its losses to close at 43.66/6650, down from Monday's close at 43.62/63.

In the forward premia market, the 12-month premium closed at 0.75 per cent (0.67) and the six month at 0.71 per cent (0.59).

In the bond market, prices fell by 5 paise with the price of global crude touching $65.82. A dealer at a private bank said that some primary dealers were been sitting on huge positions with respect to the 7.37 per cent and 8.07 per cent papers and were unable to sell.

There was a degree of uncertainty also about the announcement of an auction by the government.

After closing hours, the RBI announced a Rs 6,000-crore auction of the 11.90-2 year-2007 paper.

The 7.37-9 year-2014 paper opened at Rs 102.16 (7.03 per cent YTM) and closed at Rs 102.03 (7.05 per cent YTM), down from Monday's Rs 102.18 (7.03 per cent YTM). The 10.25-16 year-2021 opened at Rs 125.56 (7.46 per cent YTM) and closed at Rs 125.36 (7.48 per cent YTM), lower than Monday's Rs 125.58 (7.46 per cent YTM). The 7.38-10 year-2015 benchmark paper was dealt at Rs 102.16 (7.07 per cent YTM).

In the one-day reverse repo auction, the RBI received and accepted 41 bids amounting to Rs 32,000 crore. In the CBLO market, there were 170 trades for Rs 6,990.45 crore in the rate range of 4.81-4.95 per cent.

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