The Hindu Business Line : Rupee loses 5 paise; securities weak

MUMBAI: Heavy demand for dollars from oil companies and importers pushed the rupee southward as it closed at 45.9550/9650, weaker than previous close of 45.90/91.

"Month-end demand from corporates on account of loan and interest payments, in addition to oil-related demand for greenbacks put the rupee under pressure," said a dealer at a private sector bank.

"With oil prices rising to $46 per barrel and September 27 being the last trading day for spot rupee, dollar was in heavy demand," he added.

The domestic currency opened at 45.9350/9450 wherefrom it weakened throughout the day, traders said. Although dollar supplies from public sector banks were seen, perhaps on behalf of RBI, they were absorbed by corresponding demand, they added. Forward premia inched up, with importers rushing to cover their payables. The six-month forward closed at 1.98 per cent (1.82 per cent) while the twelve-month forward ended at 1.65 per cent (1.54 per cent).

Prices in bond market witnessed a fall of over 50 paise on account of profit booking and fears of rising inflation, dealers said.

"There was a steady sell-off of securities from few banks in a thin volume market," said a dealer at a private sector bank. Ahead of September 30 half-yearly results, prices are likely to hold at current levels, he added. The ten-year benchmark 7.37 per cent 2014 paper fell steadily to close at Rs 108.90 at an yield of 6.12 per cent against Friday's closing yield of 6.04 per cent.

The 11-year benchmark 7.38 per cent 2015 paper closed at an yield of 6.16 per cent, 8 basis points higher than Friday's closing yield.

Meanwhile, call rates were in the range of 4.50-4.60 per cent with liquidity position comfortable, dealers said. Under the LAF, banks parked Rs 12,875 crore in the one-day repo through 36 bids while in the 7-day repo all 7 bids worth Rs 2,625 crore were accepted.

In the CBLO market, 93 trades worth about Rs 2,500 crore were transacted in the range of 4.35-4.75 per cent.