The Hindu Business Line : Rupee closes flat; bond prices rise

MUMBAI: The rupee was volatile against the US dollar on Monday, but closed flat as the greenback strengthened against all the major currencies. It opened lower at 44.26/27, as the dollar had strengthened against various currencies on Friday.

During the day trade, the rupee touched a high of 44.09 on dollar selling. It ended trade at 44.1350, a tad higher than Friday's close of 44.14/15. Foreign banks had orders to sell dollars on Monday, a dealer said. In the forward premia market, the six-month premia closed between 2.80 and 2.85 per cent (2.7 per cent) and the one-year closed at 2.2 per cent (2 per cent).

In the bond market, prices rose as a slight ease in liquidity prompted buying interest. Dealers said the infusion of about Rs 3,000 crore through the reverse-repo window of the liquidity adjustment facility brought trading interest in the market.

"Traders had aggressively cut down their positions. So, there was some bargain buying at the lower price levels," said a dealer at a private bank.

The 8.07 per cent -11 year-2017 paper opened at Rs 104.70 (7.43 per cent YTM/ yield to maturity) and closed at Rs 104.87 (7.41 per cent YTM), 40 paise higher than Friday's Rs 104.46 (7.47 per cent YTM.) The 9.39 per cent-5 year-2011 paper opened at Rs 110 .60 (7 per cent YTM) and ended at Rs 110.73 (6.97 per cent YTM), up from Friday's Rs 110.41 (7.04 per cent YTM).

The call rate closed at 6.75-7 per cent but touched an intra-day high of 7.60-7.75 per cent. In the first one-day reverse-repo, RBI received no bids but there were 28 bids for Rs 10,955 crore in the repo auction.

In the second one-day reverse-repo auction, it received four bids for Rs 3,036 crore and eight bids for Rs 2,285 crore in the repo auction. In the CBLO market, there were 365 trades for Rs 18,232.80 crore in the rate range of 6.26-7 per cent.