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MUMBAI: The rupee on Monday opened higher but closed a notch lower, comparable to Friday's closing levels of 45.8550/8650 against the dollar.

There was good dollar inflow, which was matched by demand from banks towards the latter half of the day in anticipation of no dollar supply on Tuesday.

The US markets were closed on Monday on account of Labour Day and therefore there will be no dollar inflow on Tuesday. There might be a plunge in the value of the rupee against the greenback and some dealers expect the Reserve The central bank was seen protecting the levels of 45.8250/8350 against the dollar buying up large quantum of greenback.

In the forwards market, the six months premium closed at 1.03 per cent (1.00 per cent) and the one-year closed at 1.06 per cent (1.11 per cent).

Expectations about an open market operations by RBI weighed the market down and finally when the announcements came, there was a further fall in prices.

The Government securities prices dipped by 30 paise in the early half of the day, recovered by 10 paise and dipped again on the auction-cum-OMO announcement by 30 paise in the long-end papers. The yield curve became a little steeper with a sharper rise in yields in the longer-term than the shorter-end.

In the longer segment, the 8.35 per cent 2022 paper, opened at Rs 127.80, dipped to 127.50, recovered to Rs 127.60 and closed lower at Rs 127.30 and a corresponding yield of 5.91 per cent.

The 10-year benchmark, 9.81 per cent 2013 paper opened at Rs 134.33 and closed at Rs 134.15 and a corresponding yield of 5.28 per cent.

In the inter-bank call money market, there was plenty of liquidity and rates were easy at 3.75-4.00 per cent.

Through the LAF window, the central bank accepted all bids worth Rs 28,000 crore at the repo rate of 4.50 per cent.

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