The Hindu Business Line : Rupee tad weaker; bond prices flat

The domestic currency opened at 45.16/17 and touched an intra-day low of 45.10. It, however, closed the day at 45.16/17, lower than Wednesday's close of 45.12/14.

A dealer at a private bank said there was some month-end demand and PSU banks were also buying dollars. However, dollar inflows into the market prevented the rupee from drastically dipping against the greenback.

Dealers said the outlook was favourable towards the rupee and if foreign institutional investor inflows continued, the home currency could test 45.10.

In the forward premium market, the 6-month ended at 1.33 per cent (1.45 per cent) and the 12-month was unchanged at 1 per cent.

Bond prices were flat with intra-day appreciation in the long term papers. According to dealers, the bond market had been showing a stable trend for the past two days with a rise of about 10-25 paise from the previous close. On Thursday, prices were more or less flat, with an increase of about one-two paise.

Call rates touched 7.25 per cent in the early session and remained above 7 per cent in the second half as well. It closed around 7.10 per cent (6.90 per cent). However, the market ignored the high call rates, said a dealer with a private bank.

"The market has factored in all the negatives, including the high call rates. Even the IMD redemption had no negative on the trading," said a dealer with a private bank.

The 8.07- 12-year 2017 paper opened at the same level as Wednesday's close at Rs 106.55 (7.20 per cent YTM) and ended at Rs 106.56 (7.20 per cent YTM). The 10.25 16-year 2021 paper opened at Rs 126.37 (7.36 per cent YTM) and closed at Rs 126.38 (7.36 per cent YTM) almost unchanged from the earlier close of Rs 126.36 (7.36 per cent YTM).

Friday, being the last day of the calendar year there could be some trading interest, said the dealer. "Bond prices could see an upward movement tomorrow of about 10 paise, as there are no more negatives," he said.

In the first auction, RBI did not receive any bids for reverse repo. It received and accepted 36 bids for Rs 24,365 crore in the repo auction. In the second auction, RBI received three bids for Rs 3,220 crore in the reverse repo auction and 16 bids for Rs 5,745 crore in the repo auction. In the CBLO market, there were 296 trades for Rs 9,632.15 crore in the range of 6.25-6.80 per cent.