The Hindu Business Line : Rupee tad weaker; bond prices up

MUMBAI: The rupee depreciated marginally against the dollar on Monday mainly on account of the Reserve Bank of India buying dollars from the forex market, dealers said.

The domestic currency opened at 44.15/16 and moved up to 44.19/20 levels. However, it closed at 44.23/24, down from Friday's close at 44.19.

The real effective exchange rate has risen to 9.79 per cent and the RBI might have found this a good opportunity to leave the rupee find its level since all the major currencies except the rupee have been depreciating against the dollar, the dealer added.

In the forward premia market, the six-month ended at 1.83 per cent (two per cent) and the 12-month closed at 1.5 per cent (1.65 per cent).

Bond prices were up as the interest rates in the spot rupee and forward markets came down a bit, though liquidity was tight. Prices opened higher by about 30 paise. During the day, they fell by about 12 paise but closed about 20 paise higher from the previous close.

The 8.07 per cent 11-year 2017 paper opened at Rs 105.33 (7.35 per cent YTM) touched a high of Rs 105.66 to close at Rs 105.53 (7.32 per cent YTM) against the previous close of Rs 105.40/41 (7.34 per cent YTM).The 10.25 per cent 15-year 2021 paper opened at Rs 125.5 (7.43 per cent YTM) and closed at Rs 125.39 (7.44 per cent YTM), against Rs 125.3 (7.45 per cent YTM).

Call rates were at 7-7.25 per cent (6.5 per cent). Dealers said that the auction of the two Government papers scheduled for Tuesday is likely to sail through smoothly, after the RBI reduced the amount from Rs 6,000 to Rs 3,000. But the liquidity position post-auction will have to be watched.

In the first one-day auction, the RBI did not receive any bids for the reverse repo but received 13 bids for Rs 14,605 crore in repo. In the second one-day reverse repo auction, it received one bid for Rs 100 crore and in the repo auction, 16 bids for Rs 3,315 crore. In the CBLO market, there were 322 trades for Rs 17,151.5 crore in the 6.40-6.50 per cent.