The Hindu Business Line : Rupee, gilts fall on rising oil prices

The strengthening of the dollar against the euro and other foreign currencies as well the spiralling oil prices were also responsible for the downturn of the rupee, said a dealer at a private bank.

The forward premia market remained lacklustre with the 6-month premium closing at 1.48 per cent (1.56) and the 12-month premium closing at 1.32 per cent (1.37). "All the action was at the spot market. The oil importers have been very active," said the dealer.

The bond prices fell by around 40 paise, as fears of oil prices affecting inflation loomed large. Inflation for the week ended Friday was 5.30 per cent.

The 7.38 per cent 10-year benchmark paper closed at Rs 105.00 (6.71 per cent YTM) on Monday, against Friday's close of Rs 105.43 (6.65 per cent YTM). It had opened at Rs 105.34 (6.68 per cent YTM).

A dealer at a private bank said, "There is a fear that liquidity will suffer on account of the advanced tax flows which could be Rs 11,000-15,000 crore. There was also concern about the new calendar borrowing which will be declared tomorrow."

In the one-day reverse repo under the Liquidity Adjustment Facility, the RBI received and accepted 24 bids amounting to Rs 21,075 crore.

The call rate closed at 4.85 per cent. In the CBLO market, 150 trades aggregating Rs 5,443.35 crore were put through in the rate range of 4.70 to 6 per cent.

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