Financial Daily from THE HINDU group of publications
Thursday, Feb 09, 2006
Financial Daily from THE HINDU group of publications Thursday, Feb 09, 2006 |
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Money & Banking
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Forex Rupee dips; bond prices decline Our Bureau
MUMBAI: The rupee dipped against the dollar on Wednesday in tandem with other major currencies such as the yen. The domestic currency opened at 44.20/21 and moved up to 44.19. It then fell to 44.27 and finally closed to 44.25/26, down from the previous 44.23/24. Dealers said the rupee depreciated as the yen fell by 35 basis points. A dealer at a private bank said that there was high supply as well as demand for dollars from banks. In the forward premia market, the six-month closed at 2.08 per cent (1.79) and the 12-month ended at 1.64 per cent (1.47). Prices in the bond market fell as there were concerns about the tightness in liquidity. A dealer at a private bank said, "The market is bearish due to the hardening interest rates. There is tremendous pressure on liquidity and Government expenditure is also not coming through." Dealers pointed out that the selling interest at 10 paise, which is lower than the cut-off price after the auction on Tuesday, indicated a bearish outlook in the near term. The 8.07-11 year-2017 paper opened at Rs 105.40 (7.34 per cent YTM) and closed at Rs 105.32 (7.35 per cent YTM), the same level as on Tuesday. The 7.40-29 year - 2035 paper opened at Rs 97.70 (7.59 per cent YTM) and closed at Rs 97.52 (7.61 per cent YTM). The call rate closed at 7.25 per cent (7-7.25). In the first two-day auction, RBI received no bids in the reverse repo, but there were 33 bids for Rs 13,150 crore in the repo. In the second two-day reverse repo auction, it received one bid for Rs 100 crore and 13 bids for Rs 3,940 crore in the repo auction. In the CBLO market, there were 295 trades for Rs 14,880.30 crore in the 6.40-6.54 per cent range.
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