The Hindu Business Line : Rupee tad higher; bonds stay flat

The rupee opened higher but could not sustain its gains during the day. The domestic currency opened at 44.12/13 and ended at 44.22/23, higher than Friday's close at 44.24.

Dealers said the rupee fell during the day, tracking the movement of the yen, which fell from 114.15 to 114.60 yen.

A dealer at a private bank said that importers were also covering their position in the market.

In the forward premia market, the 6-month closed at 1.82 per cent (1.86) and the 12-month was unchanged at 1.37 per cent. In the bond market, the traded volume was less than Rs 1,000 crore and prices were flat.

Dealers said the pressure on liquidity was a real concern in the market. "The Government seems to be reducing expenditure to control deficit. The bond market will remain dull unless the liquidity improves or there is some signal from RBI," said a dealer at a private bank.

The 10.25 per cent -15 year-2021 paper opened at Rs 126.51 (7.34 per cent YTM) and closed at Rs 126.505 (7.34 per cent YTM). The 8.07 per cent -11 year-2017 paper opened at Rs 106.52 (7.20 per cent YTM) and ended at the same level. This was lower than Friday's close at Rs 106.495 (7.20 per cent YTM).

The call rate closed at 7.40 per cent (6.75-7) and touched an intra-day high of 7.70 per cent.

In the first one-day reverse-repo, RBI received two bids for Rs 45 crore and 32 bids for Rs 16,625 crore in the repo auction. In the second one-day reverse-repo auction, RBI received four bids for Rs 810 crore and 17 bids for Rs 6,530 crore in the repo auction. In the CBLO market, there were 297 trades for Rs 11,813.5 crore in the rate range of 6.10-6.39 per cent. (6.05-6.40).