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MUMBAI: With demand overpowering supplies of the greenback for a change, the rupee dipped by 12 paise to end Monday at 45.54/56 against the dollar. On Friday, the domestic currency had ended the day at 45.42.

This level was last seen when the rupee touched a 36-month high on October 1, after which it has consistently been appreciating.

Seeing the rupee weakening, banks holding short dollar positions came in to buy as their `cut loss levels' got triggered.

The rupee opened the day at 45.39/40, and touched an intra-day low of 45.60. There was no intervention by the central bank, dealers said.

The forwards market slowly crept behind the spot. The six months forward closed at 0.15 per cent (0.30 per cent) and the one-year closed at 0.40 per cent (0.42 per cent).

In the debt markets, government security prices and corporate bond prices were seen falling by 70-120 paise across maturities with the apex bank stating that CRR could be moved up or down as a tool to manage liquidity.

An already bearish market read this as a possible hint to an increase in CRR, which would then curtail the liquidity in the system. The market saw many sellers, the most prominent among them being mutual funds

There is also confusion in the market over the recently specified RBI guidelines on banks' exposure limits to unlisted securities. Market players are awaiting a clarification from the bank over whether or not mutual funds fall under this limit.

Surplus liquidity was reflected in the LAF amounts of about Rs 14,000 crore all of which was accepted and the inter-bank call money rates sailing smooth at 3.25-4.50 per cent.

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