The Hindu Business Line : Rupee, bonds stay range-bound

MUMBAI: The rupee was almost unchanged against the US dollar, as demand and supply were well-balanced. Dealers said the dollar-rupee movement is biased towards 46 and this was some kind of a consolidation before the next move.

The rupee opened at 45.74 and traded in the narrow range of 45.75-45.79 before ending at 45.75/7550, almost unchanged from Friday's close of 45.76/77.

"Today, there were conflicting signals, as the euro rallied against the dollar on Friday, but the domestic stock market was weak. So the market is waiting for better indicators," said a dealer with a private bank. He expects the rupee to touch 46 in a couple of sessions. There was hardly any movement in the forward premia market with the six-month closing at 0.52-0.56 per cent (0.53 per cent) and the one-year at 0.42-0.45 per cent (0.46 per cent).

Bond prices inched up by 5-10 paise, as call rates eased and the liquidity situation improved. The market opened lower, but picked up momentum due to the easing of liquidity.

However, there was a sell-off seen towards the close due to expectations of an auction announcement, said a dealer.Demand was also low due to the impending auction.

The 7.49 per cent - 12-year 2017 paper opened at Rs 101.61 (7.27 per cent YTM) and closed at Rs 101.65 (7.27 per cent YTM), a tad higher than Friday's level of Rs 101.62 (7.28 per cent YTM).The 7.37 per cent-nine-year 2014 paper opened at Rs 102.50 (6.97 per cent) and ended at Rs 102.51 (6.96 per cent YTM), almost unchanged from the previous close of Rs 102.50 (6.97 per cent YTM). The 7.38 per cent-10-year 2015 paper was dealt at Rs 102.10 (7.07 per cent YTM) against the earlier level of Rs 102.04 (7.08 per cent YTM).

Though in the earlier part of the day, call rates were quoted at 6.25, they eased to close at 5.40-5.50 per cent (6.20-30 per cent). This was a positive signal for the market.

Another positive signal was that banks did not borrow from RBI for the first time since November 9, which indicates that liquidity has improved.

In the one-day reverse repo, under the liquidity adjustment facility, the RBI received and accepted five bids amounting to Rs 1,465 crore. In the CBLO market, there were 318 trades for Rs 12,054.10 crore in the rate range of 5.25-6.30 per cent.

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