The Hindu Business Line : Rupee firms up; securities flat

MUMBAI: The rupee moved up against the dollar in tandem with the appreciation of the euro against the greenback but by the end of the session lost most of its gains.

The domestic currency opened Monday's trade at 44.08 but fell during the day. It ended the day at 44.21, up from Friday's close at 44.25.

Dealers said the rupee depreciated due to oil related demand. "Importers were buying dollars in the market. In fact, there could be more month-end related demand this week," said a dealer at a private bank.

In the forward premia market, the 6-month closed at 1.96 per cent (2.2 per cent) and the 12-month ended at 1.52 per cent (1.63 per cent).

In the bond market, prices remained flat but the traded volume was thin.

Dealers said prices initially fell due to the hardening of global crude to $69. However, some buying interest in the second half of the day enabled the bonds to recover..

A dealer at a private bank said traders were not taking positions ahead of the review of the credit policy. If the central bank cuts the cash reserve ratio by 50 basis points, as is expected by a section of the market, bond prices could rise by 50 paise to a rupee, said the dealer.

The 9.39 per cent-5 year-2011 paper opened at Rs 111.95 (6.73 per cent YTM) and closed at Rs 111.97 (6.72 per cent YTM). The 10.25 per cent-15 year-2021 paper opened at Rs 126.43 (7.35 per cent YTM) and ended at Rs 126.50 (7.34 per cent YTM), lower than Friday's close of Rs 126.52 (7.34 per cent YTM).

The call rate closed at 7 per cent (6.50-6.60 per cent), but touched an intra-day high of 7.25 per cent. In the first one-day reverse-repo, the RBI received one bid for Rs 15 crore and 32 bids for Rs 14,400 crore in the repo auction

In the second one-day reverse-repo auction, the RBI received three bids for Rs 330 crore and 13 bids for Rs 4,795 crore in the repo auction. In the CBLO market, there were 302 trades for Rs 12,055.9 crore in the rate range of 6.21-6.50 per cent.