The Hindu Business Line : Rupee edges up; bond prices dip

MUMBAI: The rupee reversed its downturn and edged up against the dollar on account of the overseas gain in currencies such as euro and pound and good inflows.

The Indian currency opened at 46.28/29 and touched a high of 46.15. At this level, import demand and profit-taking pulled the rupee slightly down. It ended at 46.1850/1950, higher than Monday's close of 46.3250/3350.

The rupee would continue to be under pressure until money from the ICICI Bank issue comes in next week, said a dealer with a private bank.

"Today's trade was more speculative. There is no help for the rupee right now," he said.

The forward premia were fairly steady, with the six-month closing at 0.8 per cent (0.68 per cent) and the one-year at 0.65 per cent (0.57 per cent).

In the bond market, prices rose earlier in the day in anticipation of the Rs 8,000-crore auction. The improved liquidity had prices rising over the last few days.

However, post-auction, the prices fell by around 10 paise as some traders perceived the auction cut-off to be below expectations.

Dealers said profit-taking caused the prices to fall. A dealer at a private bank said prices could fall further on Wednesday as traders will be unwinding their positions.

The 10.25-16 year-2021 paper opened at Rs 126.15 (7.386 per cent YTM) touched an intra-day high of Rs 126.29 and ended at Rs 126.16 (7.385 per cent YTM). On Monday, it had closed lower at Rs 126.11 (7.39 per cent YTM).

The 7.49-12 year-2017 paper opened at Rs 102.13 (7.21 per cent YTM) and ended at Rs 102.09 (7.214 per cent YTM), almost the same as Monday's Rs 102.10 (7.21 per cent YTM).

The call rate closed at 5.30-35 per cent (5.20-30). In the first one-day reverse repo auction, the Reserve Bank of India received and accepted 22 bids amounting to Rs 17,460 crore. In the second auction, it received and accepted 21 bids for Rs 9,780 crore.

In the CBLO market, there were 269 trades for Rs 11,763.40 crore in the range of 5.22-5.50 per cent.

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