Financial Daily from THE HINDU group of publications
Saturday, Apr 13, 2002

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Re firm; gilts range-bound

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Mumbai: THE rupee closed relatively unchanged on Friday from the previous level of 48.9025 against the dollar in a lacklustre forex market. The domestic currency opened at 48.90.

Forex dealers said that exporters were liquidating long positions. Dollar demand and supplies remained evenly matched for most of the day. "Trading was limited to few players and the market was thin. Nationalised banks continued to stay at bay and foreign banks were unwinding their long dollars in the market,'' said a dealer with a private sector bank.

Forwards rose slightly with the six-month premium ending at 6.03 per cent (5.92 per cent) and the premium for one-year ending at 5.50 per cent (5.30 per cent).

Securities prices remained in the broad range of 10-15 paise as the bonds market reacted cautiously to the auction announcement of the Rs 6,000 crore paper on April 15. Though prices rallied from the day's lows, they closed lower from previous levels.

The 11.50 per cent 2011 paper, which had closed at around Rs 129.15 previously, ended at around Rs 129/129.05. The 9.85 per cent 2015 paper, which had closed at Rs 120.90 previously, closed at Rs 120.50 on Friday.

According to one bond dealer, "Traders expect yields to rise in the 15-year segment as there will be several issuances in this tenor during the year. There may be some devolvement in the upcoming auction as the auction size of Rs 6,000 crore is too large.''

In the inter-bank call money market, the call rates closed at around 6.35 per cent after hovering at around 6.40-6.60 per cent.

In the three-day repo auction, the RBI received and accepted six bids of Rs 9,150 crore at six per cent.

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