The Hindu Business Line : Rupee edges up; bonds stay flat

Dealers said the recovery on the Bombay Stock Exchange strengthened the rupee. "The foreign institutional investor (FII) inflows into the market caused the rupee to firm up. The fact that New York was closed today meant that there were no cash outflows," said the dealer.

According to dealers, the rupee could weaken next week due to month-end demand and a drop in FII inflows ahead of the Finance Bill for 2006/2007.

In the forward premia market, the 6-month ended at 2.45 per cent and the 12-month at 1.92 per cent.

The bond market was flat, as dealers did not take any fresh positions ahead of the Rs 5,000-crore Government papers auction, scheduled to be held before February 22. The market is hoping that the auction will be either cancelled or the amount will be reduced, given the pressure on liquidity.

"Nobody is taking fresh positions before the auction. Today, prices moved in the narrow range of 10 paise", said a dealer with a private bank. There was some action seen in floaters and in the papers in the short segment .

The 8.07 percent 11-year 2017 paper opened at Rs 105.42 (7.33 per cent YTM) and closed at Rs 105.39 (7.34 per cent YTM) against the previous close of Rs 105.40. The 7.4 per cent 29-year 2035 paper opened at Rs 97.66 (7.59 per cent YTM) and closed at Rs 97.61 (7.6 per cent YTM).

Call rates opened at around between 7.15 and closed at around 6.9-7 per cent (6.5-6.75 per cent).

In the first one-day auction, the RBI did not receive any bids in the repo auction, but received and accepted 29 bids for 18,530 crore in reverse repo.

In the second auction, it received and accepted two bids for Rs 35 crore and 10 bids for Rs 3,010 crore.

In the CBLO market, there were 283 trades for Rs 21,950.95 crore in the 6.45-6.6 per cent.