The Hindu Business Line : Rupee range-bound; bond prices fall

MUMBAI: The rupee was largely range-bound against the US dollar on Friday and ended a shade lower at 43.5250/53, a tad higher than Thursday's close at 43.5350/54.

In the forwards market, there was a rise as the 12 month closed at 1.25 per cent (1.21) and the 6 month ended at 1.30 per cent (1.29).

In the bond market, prices fell by 20-25 paise on tightening domestic liquidity as well as a rise in the US yields.

A dealer at a private bank said that there was an initial rise in the prices as domestic inflation, which was at 5.20, was as per market expectation. However, Mr Alan Greenspan's testimony which spoke of a `measured rate hike' and a growing US economy caused the US yields to rise by 2 basis points and the Indian yields followed suit.

The 7.37 per cent 9 year - 2014 paper, the recently auctioned paper, opened at Rs 103.65 (6.82 per cent YTM), rose to Rs 103.80 (6.79 per cent YTM) and then fell to Rs 103.45 (6.84 per cent YTM).

The 7.38 per cent 10 year - 2015 benchmark paper was dealt at Rs 103.80 (6.85 per cent YTM), down from Thursday's Rs 104.10 (6.80 per cent YTM).

Call rates closed higher at 5.50 per cent (5 per cent) and dealers said there were trades seen even at 5.75 per cent. In the one-day reverse repo, under the Liquidity Adjustment Facility, the RBI received and accepted 29 bids amounting Rs 13,620 crore. The CBLO market saw 194 trades, aggregating Rs 6,419.25 crore.

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