The Hindu Business Line : Rupee weakens; g-secs move up

MUMBAI: The rupee marginally weakened against the US currency for the second consecutive session to close at 46.35/37 a dollarDealers said demand for dollars during the fag end of trading, coupled with a strengthening dollar overseas, led to the dip in the domestic currency. Buying pressure was observed on account of oil companies, as a dealer said that despite recent correction in oil prices the scenario looks unchanged.

The forwards market witnessed a lot of activity, with exporters selling and causing forwards to move downward as the long-term view is of an appreciating rupee, the dealers said. The six-month forward closed at 2.55 per cent (2.68 per cent) while the 12-month forward finished at 2.22 per cent (2.35 per cent).

Bond prices continued their northward movement for the third straight session as prices closed about 60 paise higher. The positive sentiment was supported by expectation of the issues under the Market Stabilisation Scheme (MSS) of the RBI being of a smaller than expected amount.

The 10-year benchmark 7.37 per cent 2014 paper closed at a yield of 6.19 per cent, down nine basis points from the previous closing yield of 6.28 per cent. The price on the paper rose to the high of Rs 108.65 before ending at Rs 108.55. The 11-year benchmark 7.38 per cent 2015 rose 60 paise to close at Rs 108.60. In the CBLO market, highest volumes since its inception were witnessed as 113 trades worth Rs 4,404.80 crore were transacted. Meanwhile, call rates were in the range of 4-4.50 per cent. Under the LAF window, the RBI received nine bids worth Rs 1,760 crore in the 7-day repo and 48 bids worth Rs 21,580 crore in the 1-day repo. All bids were fully accepted.