Financial Daily from THE HINDU group of publications
Tuesday, Oct 25, 2005
Financial Daily from THE HINDU group of publications Tuesday, Oct 25, 2005 |
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Money & Banking
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Forex Rupee weakens; bonds edge up Our Bureau
MUMBAI: The rupee slipped against the dollar on the back of importer demand on Monday. The domestic currency opened at 45.15/17 and hovered at this level for most of the day. It touched an intra-day high of 45.12/13, but closed at 45.16/17. On Friday, the rupee had closed at 45.06/07. Dealers said that the supply of dollars was not matching up to the demand. Import-related demand for dollars towards month-end payments caused the rupee to weaken. A dealer at a private bank said that the fall in the stock markets had dampened sentiment in the forex market. "Globally, the dollar might continue to gain, with the interest rate cycle showing an upward trend," said a dealer. In the forward premia market, the 6-month premium closed at 0.58 per cent (0.5) and the 12-month premium ended at 0.51 per cent (0.49). Dealers said that the premia in the short-term had inched up while remained steady in the long-term. In the bond market, prices opened 5-10 paise lower. However, they recovered during the day. Dealers said that a statement from the Finance Minister about the likelihood of interest rates staying stable in the short and medium term and intervention from the Reserve Bank of India if a rise in fuel prices made more than a moderate impact, was a positive trigger for the bond market. A dealer at a private bank said that the pre-Credit Policy statement about the macro-economic and monetary developments released by the RBI did not necessarily make a case for a hike in interest rates. The 7.37-9 year-2014 paper opened at Rs 102.31 (7 per cent YTM) and closed at Rs 102.38 (6.99 per cent YTM), higher than Friday's close at Rs 102.275 (7 per cent YTM). The 10.25 per cent -16 year-2021 paper opened at Rs 125.41 (7.46 per cent YTM) and closed at the same level. On Friday, it had closed at Rs 125.42 (7.46 per cent YTM). The 7.38-10 year-2015 paper was dealt at Rs 101.95 (7.099 per cent YTM). The call rate closed at 5-5.05 per cent (5-5.05). In the one-day reverse repo, under the LAF, RBI received and accepted 29 bids amounting to Rs 14,275 crore. In the CBLO market, there were 274 trades for Rs 14,415.90 crore in the rate range of 4.98-5.30 per cent.
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