The Hindu Business Line : Rupee in range; bonds recover

MUMBAI: The rupee was range-bound on Wednesday and ended unchanged from Tuesday's close. The rupee opened at 44.05/06 against the US dollar and closed at 44.04/05 on Wednesday, the same as the previous level. It touched an intra-day low of 44.08.

A dealer with a public sector bank said there was not much activity in the spot rupee and there was movement in both directions. There was good demand from oil importers, which was met by supplies from exporters. There were no significant FII inflows.

The forward premia too was flat. Both the 12-month and 6-month premia closed at 0.65. Trades were thin in the forwards market, the dealer added. In the overseas market, other currencies were flat against the dollar.

In the bond market, prices fell initially but recovered marginally on value buying. Dealers said with the rising US yields and the oil prices continuing to be of concern, the sentiment in the market had been bearish.

A dealer at a private bank said that the expectation of a 25-basis point hike in the reverse repo rate in the October monetary policy and a Rs 8,000-crore auction in October had resulted in lack of buying support. There was some value buying as a result of half-yearly closing. The traded volume stood at Rs 730 crore.

The 10.25 - 16 year- 2021 paper opened at Rs 125.65 (7.45 per cent YTM), fell to Rs 125.50 but closed at Rs 125.78 (7.43 per cent YTM). This was higher than Tuesday's Rs 125.56 (7.46 per cent YTM).

The 7.37-9 year-2014 paper opened at Rs 102.21 (7.02 per cent YTM) and closed at Rs 102.29 (7.01 per cent YTM), up from Rs 102.17 (7.03 per cent YTM).

The call rate closed at 5.10 per cent but deals were done at 5.75 per cent (5-5.10). In the one-day reverse repo auction, the Reserve Bank of India received and accepted 35 bids amounting to Rs 20,415 crore. On account of the half-yearly closing, in the one-day repo auction, the RBI received and accepted two bids amounting to Rs 1,640 crore. In the CBLO market, there were 265 trades for Rs 11,253.05 crore in the rate range of 4.50-5.85 per cent.

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