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MUMBAI: Bond prices fell on Friday as the market tracked the spot rupee. Due to the rise in US yields and decline in the domestic currency, there was lack of buying support in the bond market.

Inflation at 4.14 per cent was higher than the earlier week's 4.09 per cent and also higher than market expectations. After inflation there was selling, said a dealer with a private bank.

The 7.55 5-year 2010 bond opened at Rs 103.35 (6.72 per cent YTM) and closed at Rs 103.24/27, lower than Thursday's level of Rs 103.33/38 (6.73 per cent YTM).

The 7.27 8-year 2013 bond opened at Rs 101.45 (7.03 per cent YTM) and ended at Rs 101.20/22 (7.07 per cent), down from the earlier level of Rs 101.33/35 (7.05 per cent YTM).

The 7.38 10-year 2015 benchmark paper opened at Rs 101.60 (7.15 per cent YTM) and closed at Rs 101.55/60 (7.16 per cent YTM) against the previous level of Rs 101.65 (7.15 per cent YTM).

The dealer said bond prices depreciated continuously throughout the day as they were tracking the spot rupee.

Call rates opened at 5-5.05 per cent and closed at 3-4 per cent, as it was reporting Friday (5-5.10 per cent).

In the one-day reverse repo auction, under the Liquidity Adjustment Facility, RBI received and accepted 32 bids amounting to Rs 10,485 crore.

The CBLO market saw 259 trades being put through in the 1.26-5.24 per cent range, amounting to Rs 9,159.85 crore.

The rupee was volatile against the dollar during the day on the back of the yuan revaluation .

The domestic currency opened at 43.17/19 and saw a six-year high, scaling to an intra day high of 43.13. It then depreciated to close at 43.48/49 on dollar buying.

Dealers said that the rupee rose on Thursday on a euphoric response to the yuan revaluation. However, the RBI intervened through PSU banks, which were steadily buying dollars during the day. There was some import related demand as well as profit taking by inter-bank players and corporates, they said.

In the forward premia market, the 12-month premium fell to 0.97 per cent (1.26) and the 6-month 0.89 per cent (1.51).

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