The Hindu Business Line : Bonds decline; rupee steady

MUMBAI: Bond prices declined by around 50 paise across maturities in the Government securities market on Tuesday, over continued apprehensions about inflation.

The 7.37 per cent 2014 paper got dealt to a high of Rs 110.90 before settling lower at Rs 110.35/40. The 11.83 per cent 2014 was traded at Rs 137.50 before it came down to close at Rs 137.25 and the 12.32 per cent 2011 at Rs 130.50 before settling at Rs 130.10. Dealers said the market was jittery over news reports indicating that inflation rate calculations were not reflecting many significant factors, and therefore might not be accurate.

Call rates were at 4.25 per cent levels in the inter-bank market. In the seven day repo under liquidity adjustment facility, RBI received and accepted 11 bids amounting to Rs 2,565 crore at 4.5 per cent, while in the one day repo, 42 bids amounting to Rs 25,545 crore were received and accepted at 4.5 per cent.

In the Collateralised Borrowing and Lending Obligation market, 122 trades were conducted amounting to Rs 3,639.15 crore in the rate range of 4.10-4.35 per cent.

The domestic currency closed at 46.35, almost unchanged from its previous closing levels. After opening at 46.33/34, the rupee touched 46.36 on a good bout of dollar buying by corporates, following which state-run banks sold dollars, which buoyed the rupee to a high of 46.31. However, some dollar buying from oil majors brought the rupee back to end at its closing levels.

In the forwards market, the six-month premium ended at 2.10 per cent (1.99 per cent) while the one-year premium ended at 1.82 per cent (1.73 per cent).