The Hindu Business Line : Rupee firm; bond prices move up

MUMBAI: The rupee was firm against the dollar on Tuesday due to good supplies related to the Holcim offer and more inflows expected with the Sensex inching close to the 10,000 mark, said dealers.

On Tuesday, the rupee opened at 44.12/13 and touched a high of 44.04/05. Dollar buying by State Bank of India brought the rupee down to 44.14/15. However, trade ended at 44.12, slightly higher than Monday's close of 44.1350.

A dealer with a private bank said, "SBI's buying kept the rupee from crossing the 44.10 level. This has happened about four or five times now. But we don't know if it was oil-related buying or on instructions from RBI."

The forwards premia market saw some easing, with the six-month premium closing at 2.45 per cent (2.80-2.85 per cent) and the one-year closing at 1.9 per cent (2.2 per cent).

The dollar was range-bound against other major currencies, ahead of the US Federal Reserve meeting scheduled on Tuesday. The bond prices rose for the third session in a row, as fears of liquidity eased. The bond market saw good volumes and buying interest. Prices increased by around 30 paise.The entire gain in the three trading sessions, since Friday, has been Rs 1.25 said a dealer with a private bank.

The 8.07 per cent -11 year-2017 paper opened at Rs 104.95 (7.40 per cent YTM) and closed at Rs 105.19 (7.37 per cent YTM) up from Monday's level of Rs 104.87 (7.41 per cent YTM). The 9.39 per cent-5 year-2011 paper opened at Rs 110.85 (6.95 per cent YTM) and ended at Rs 110.91 (6.94 per cent YTM), up from the previous close of Rs 110.73 (6.97 per cent YTM).

The call rate was close to 7 per cent at the end of trade (6.75-7 per cent). In the first one-day reverse repo auction, RBI received no bids but there were 24 bids for Rs 8,920 crore in the repo auction.

In the second one-day reverse-repo auction, RBI received six bids for Rs 2,925 crore and eight bids for Rs 2,710 crore in the repo auction.

In the CBLO market, there were 409 trades for Rs 20.713.7 crore in the rate range of 6.25-6.55 per cent.