The Hindu Business Line : Rupee firms up; call rates spurt

This is the second consecutive gain of the rupee. On Thursday it had gained by 14 paise. This follows a dipping rupee in recent months. The RBI has been supporting the rupee at 45.45 levels over the past few days and is likely to do so for another fortnight. Volatility in oil prices, which has fluctuated from $40 per barrel to $42 and then to $39 per barrel however, has not been reflected in the rupee.

The forwards were in premium on account of sell buy swaps by banks and the RBI. The six-month forward closed at 8.50 paise premium, 0.39 per cent (0.22 per cent) and the one-year forward closed at 14.50 paise premium, 0.33 per cent (0.26 per cent).

The inter-bank call rates were higher following the Rs 10,000-crore auction held on Thursday. Call rates, which have been steady at 4.00-4.50 per cent over several months, touched 6.00-6.50 per cent before closing at 5.50 per cent.

The 10,000-crore auction payout had lenders missing from the market, hence, a mismatch between demand and supply caused higher call rates. A similar rise in call rates had been seen on the previous Friday on account of it being a reporting Friday.

The bond market opened on a positive note with prices rising 15-50 paise intra-day across securities.

The 8.07 per cent 2017 paper opened at Rs 121.20, reached Rs 121.50, was dealt up to the high of Rs 121.70 before closing at Rs 121.62/65. The yield to maturity (YTM) for this paper was 5.64 per cent. The 7.37 per cent 2014 paper opened at Rs 115.87/90, reached a high of Rs 116.00 before closing at Rs 115.95 with YTM 5.26 per cent.

The response to Thursday's auction paper - the 5.59 per cent 2016 paper - was positive as it opened at Rs 100.15 and closed 30 paise higher. The 2028 paper had restricted participation, as it is not a very liquid paper.

Through the seven-day repo, RBI accepted 29 bids amounting to Rs 8,450 crore. Under the 3-day reverse repo auction one bid worth Rs 800 crore was accepted.