The Hindu Business Line : Rupee volatile; gilts lacklustre

MUMBAI: The rupee was volatile but recovered most of its losses against the greenback on Thursday on the back of dollar inflows. It opened at 45.32 and touched an intra-day low of 45.38/39. It, however, recovered to close at 45.20, up from Wednesday' s 45.23.

Dealers said the domestic currency opened lower as euro had fallen in New York trade. However, foreign institutional investor inflows buoyed the rupee . A dealer at a private bank said that big corporates were also seen selling dollars at the 45.38/39 level. "In the forward premia market, the 12-month closed at 0.89 per cent and the 6-month at 1.18 per cent.

In the bond market, the traded volume at under Rs 500 crore was very thin.

Dealers said that traders stayed away because of liquidity crunch. "There has been a rise in the yields of short-term corporate bonds, g-secs and treasury bills," said a dealer.

Traders are either not taking new positions or cutting their existing positions because the situation was not likely to improve until the IMD redemption got over, said dealers.

The 8.07 12-year 2017 paper opened at Rs 106.30 (7.23 per cent YTM) and closed at Rs 106.32 (7.23 per cent YTM), almost unchanged from Wednesday's close of Rs 106.31 (7.23 per cent YTM). The 10.25 16-year 2021 paper opened at Rs 126.08 (7.39 per cent YTM) and ended at Rs 126.095 (7.39 per cent YTM), unchanged from the previous close.

The call rate closed at 5.50/60 per cent (6.25). In the first one-day reverse repo auction, RBI received and accepted two bids amounting to Rs 100 crore, and 22 bids for Rs 9,160 crore in the repo auction.

In the second one-day reverse repo auction, the bank received 10 bids for Rs 3,850 crore, and one bid for Rs 300 crore in the repo auction. In the CBLO market, there were 345 trades for Rs 12,050 crore in the range of 5.25 -6.40 per cent.