The Hindu Business Line : Rupee weaker, bonds steady

MUMBAI: The rupee closed marginally weaker by about five paise to end at 46.39 against a dollar on Tuesday. It had closed on Monday at 46.3325/3450.

According to dealers, the rupee appreciated in early trading hours but lost ground later following sustained buying of dollars by banks and corporates. The rupee touched intra-day high of 46.2750 and low of 46.40.

The forwards closed higher as the six-month ended at 2.40 per cent (2.35 per cent) while the twelve-month forward ended at 1.95 per cent (1.91 per cent).

Bond prices ended more or less unchanged from Monday's levels in a low volumes of about Rs 1,500 crore, even though there was a slight recovery in the prices after positive comments from the Finance Ministry.

Statements saying inflation will be controlled at about 5.00 per cent, in addition to a positive note about monsoon saw prices rising by about 10-15 paise.

The 7.37 per cent 2014 paper closed at yield of 6.23 per cent after it rose to 6.27 per cent during the day. The 11-year benchmark closed at the yield of 6.35 per cent at a price of Rs 108.20. Market players are anticipating auction announcement of the Central Government debt due in this week or early next week.

Call rates in the inter-bank market were ruling at about 4.30-4.40 per cent. Under the LAF window the RBI fully accepted the 43 bids received worth Rs 14,365 crore.