The Hindu Business Line : Rupee slips; bonds firm

MUMBAI: The rupee closed marginally weaker on Tuesday at 45.8650/8725 against the dollar. On Monday, the domestic currency had closed at 45.84/85.

Some amount of dollar supplies in the early trades led the rupee to touch the day's high of 45.83, dealers said. Heavy demand for dollars from oil corporates and short covering by banks led the rupee downward to its close, they added.

Forwards inched up as the six month forward finished at 2.66 per cent (2.65 per cent) while the twelve-month forward ended at 2.25 per cent (2.20 per cent).

Bond prices closed more or less unchanged from the previous levels. Earlier, they rose by nearly 75 paise. The 11-year benchmark 7.38 per cent 2015 paper climbed as high as Rs 104 before settling to close at Rs 103.45 at a yield of 6.93 per cent. The 10-year benchmark 7.37 per cent 2014 paper finished at Rs 103.90 at a yield of 6.80 per cent.

"Value buying by traders and mutual funds pushed up the prices by nearly a rupee," said a trader. Profit-booking saw prices falling as they closed at Monday's levels, he added.

Call rates were in the range of 4.40-4.50 per cent.

Under the LAF window, the RBI mopped up Rs 6,055 crore through 28 bids in the 2-day repo, while Rs 205 crore were absorbed in the 7-day repo by way of 2 bids.

In the CBLO market, 149 trades worth Rs 4,772.25 crore were transacted in the rate range of 4.30-4.65 per cent.