The Hindu Business Line : Rupee weakens; gilts decline

MUMBAI: The rupee substantially weakened against the US dollar on Monday on better-than-expected US trade deficit figures and a fall in the value of the euro.

The rupee opened 10 paise lower at 43.61, from Friday's close at 43.5250/53. It ended at 43.67, down by 15 paise from the previous close. In the forward premia market, there was a rise as the 12-month closed at 1.27 per cent (1.25) and the six-month ended at 1.4 per cent (1.30).

In the bond market, prices rose by 15-20 paise but closed lower on concerns of tightening liquidity. Dealers said that the Rs 2,400-crore State development loan auction on Tuesday, advanced tax outflows to the tune of Rs 5,000 crore as well as the Union Government's auction between June 16 and 24 were causes for concern about the liquidity.

The recently auctioned 7.37- 9 year-2014 paper opened at Rs 103.48 (6.83 per cent YTM) and closed at Rs 103.55, higher than Friday's Rs 103.45 (6.84 per cent YTM).

The 7.38-10 year-2015 benchmark paper, which fell by 30 paise ended lower at Rs 103.50 (6.8950 per cent YTM), lower than Friday's Rs 103.80 (6.85 per cent YTM). Call rates were in the 4.90-5.10 per cent range. In the one-day reverse repo, under the Liquidity Adjustment Facility, the RBI received and accepted 22 bids amounting Rs 12,020 crore. The CBLO market saw 180 trades, aggregating Rs 8,704.60 crore in the rate range of 4.90 to 5.10.

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