The Hindu Business Line : Rupee steady; bonds subdued

MUMBAI: The domestic currency closed at 46.29/30 against the dollar on Thursday — around four paise stronger as compared to its closing levels on Wednesday at 46.33.

The rupee's strength was largely on account of the dollar's weakness overseas, dealers said. The market also witnessed some amount of dollar selling from corporates and state-run banks, which may have helped in propping up the domestic currency, they said.

"The rupee continues to remain under pressure since inflows have substantially slowed down. But it may remain strong, as long as the dollar continues to remain weak against international currencies," dealers said.

The forwards market premia eased in tandem with the spot rupee. The six-month premium ended at 1.88 per cent (2.05 per cent), while the one-year premium ended at 1.68 per cent (1.88 per cent).

Bond prices remained subdued in a lacklustre Government securities market, with most market players avoiding the build-up of huge positions ahead of inflation announcement on Friday. The 7.37 per cent 2014 got dealt up to Rs 110.40 — 5.95 per cent yield-to-maturity(Rs 110.50), while the 7.38 per cent 2015 got dealt at Rs 110.60.

Call rates remained at around 4.50 per cent in the inter-bank market. In the CBLO market, 124 trades were conducted amounting to Rs 4,141.10 crore in the rate range of 4.05-4.40 per cent.

In the seven-day repo under the liquidity adjustment facility, RBI received and accepted eight bids amounting to Rs 1,195 crore at the rate of 4.50 per cent, while in the one-day repo, 51 bids amounting to Rs 28,315 crore were received and accepted at the rate of 4.50 per cent.