The Hindu Business Line : Rupee strengthens; long-papers rise

MUMBAI: The rupee gained against the US dollar on Thursday as overseas currencies gained and domestic equity markets saw good foreign fund inflows.

The rupee opened at 44.69/70 and touched a high of 44.64 before ending trade at 44.71, up from Wednesday's close of 44.79.

The forward premia was slightly higher, with the six-month closing at 1.22 per cent (1.15 per cent) and the one-year at 0.95 per cent (0.87 per cent).

In the bond market, prices appreciated by around 10 paise in select securities of a longer tenure. Dealers said that the announcement of the Rs 10,000-crore auction after trading hours on Wednesday reduced uncertainty and brought buyers into the market.

A dealer at a private bank said significant improvement of liquidity in the system has created trading interest. The only concern is the rise in the price of global crude to $63, said the dealer.

The 8.07-12-year 2017 paper opened at Rs 106.60 (7.19 per cent YTM) and closed at Rs 106.75 (7.17 per cent YTM), lower than the earlier level of Rs 106.65 (7.19 per cent YTM). The 10.25-16-year 2021 paper opened at Rs 126.65 (7.33 per cent YTM) and ended at Rs 126.70 (7.33 per cent YTM), slightly lower than Wednesday's close of Rs 126.64 (7.33 per cent YTM).

The call rate was unchanged at 5.5/5.6 per cent. In the first one-day reverse repo auction, the RBI received one bid for Rs 500 crore and eleven bids for Rs 2,855 crore in the second auction. There were no bids for the repo auction.

In the CBLO market, there were 403 trades for Rs 18,836.40 crore in the range of 5.22-5.51 per cent.