The Hindu Business Line : Rupee strengthens; bonds range-bound

Dealers said the rupee appreciated against the dollar buoyed by robust inflows. However, heavy buying by banks at 44.91 led the rupee to close lower. Dealers said the rupee could appreciate to 44.80 during the day.

A dealer at a private bank said the rupee also seemed to be tracking the movement of the yen during the day. Globally, all major currencies such as the euro strengthened against the dollar.

In the forward premia market, the 6-month closed at 1.07 per cent (1.1) and the 12-month at 0.85 per cent (1.17).

In the bond market, prices moved in a band of 15-20 paise but remained flat at the end of the day. Dealers said prices moved up on signs of improved liquidity and lower call rates.

A dealer at a private bank said the anticipation of a Rs 10,000 crore government auction scheduled between January 3 and 11 led to some selling in the latter half of the day.

The 8.07-12-year 2017 paper opened at Rs 106.72 (7.18 per cent YTM) and ended at Rs 106.69 (7.18 per cent YTM), lower than Monday's close at Rs106.74 (7.17 per cent YTM)

The 10.25-16-year 2021 paper opened at Rs 126.60 (7.34 per cent YTM) and closed at Rs126.67 (7.33 per cent YTM), higher than Monday's 126.58 (7.34 per cent YTM).

The call rate closed 5.5/5.6 per cent (6.25) but touched 6 per cent during the day. In the first one-day reverse repo auction, RBI received one bid for Rs 500 crore and there were no bids in the repo auction. In the second one-day reverse-repo auction, RBI received six bids for Rs 1,440 crore and one bid for Rs 50 crore.

In the CBLO market, there were 475 trades for Rs 21,142.25 crore in the range of 5.15-6 per cent.