The Hindu Business Line : Rupee breaches 44 mark vs dollar

A chief forex dealer with a private bank said that rising oil price is a major factor that is keeping the rupee depressed. However, inflows are good and as the stock market was up, it was a positive for the rupee.

"The rupee had touched 44.08 in January. These levels are likely to continue for some time, as the rupee was overvalued," he said.

In the forward premia market, the one-year premium closed at 0.63 per cent (0.6 per cent), while the 6-month premium closed at 0.66 per cent (0.51 per cent).

Bonds flat: In the bond market, prices were flat. The market opened around 10 paise higher from the earlier close due to correction in oil prices, but closed five paise lower due to statement by the Chairman of the Prime Minister's Economic Council that deposit rates should be hiked.

The 7.37 per cent 9-year 2014 paper opened at Rs 102.18 (7.02 per cent YTM) and closed at Rs 102.08 (7.02 per cent YTM), lower than Monday's level of Rs 102.12 (7.04 per cent YTM).

The 10.25 per cent 16-year-2021 paper opened at Rs 125.60 (7.48 per cent YTM) and closed at Rs 125.50 (7.46 per cent YTM), almost unchanged from the earlier close of Rs 125.50 (7.47 per cent YTM).

The 7.38 per cent 10-year benchmark paper, which is almost illiquid, was dealt at 7.08 per cent YTM.

A dealer with a private bank said that a hike in domestic oil price is likely in one or two days. A rate hike of more than Rs 2 would have an adverse impact on bond prices, he added.

Call rates were steady at 5-5.05 per cent (4.90-5.05 per cent). In the one-day reverse repo auction, the RBI received and accepted 43 bids amounting to Rs 28,070 crore.

In the CBLO market, there were 270 trades for Rs 9,830.40 crore in the rate range of 4.67-5 per cent.

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