The Hindu Business Line : Rupee closes flat; bonds range-bound

The rupee opened slightly down at 44.34/35 and touched an intra-day low of 44.43. It appreciated to close the day at 44.30, unchanged from Monday's close at 44.29/30.

Dealers said the dollar supply in the market was good and the demand for the greenback was also subdued.

In the forward premia market, the six-month closed at 1.78 per cent (1.87) and the 12-month at 1.37 per cent(1.4). In the bond market, prices were range-bound moving by 7-10 paise during the day and the volume was thin.

A dealer at a private bank said the tight liquidity led to caution in terms of trading. "The fact that there was no major sell-off means that traders expect the liquidity crunch to be a temporary phenomenon. There is no g-sec auction for the rest of the month, so the situation should improve," said a dealer.

The 8.07 per cent-11 year-2017 paper opened at Rs 106.60 (7.19 per cent YTM) and ended at Rs 106.65 (7.18 per cent YTM), almost unchanged from Monday's close at Rs 106.64 (7.18 per cent YTM). The recently auctioned 9.39 per cent-5 year-2011paper opened at Rs 112.20 (6.69 per cent YTM) and closed at the same level.

The call rate closed at 7.20 (6.50/60) but deals were also done at 7.5 per cent. In the first two-day repo auction, the Reserve Bank of India received 34 bids for Rs 16,400 crore and one bid for Rs 25 crore in the reverse repo auction. In the second two-day reverse repo auction, RBI received three bids for Rs 600 crore and 19 bids for Rs 8,120 crore in the repo auction.

In the CBLO market, there were 281 trades for Rs 11,745.45 crore in the 5.30-6.45 per cent range.