Rupee up 17 paise on heavy capital inflows

The rupee on Tuesday rallied for the fourth straight trading session to close up by 17 paise at nearly a five-month high of 44.42/43 against the US currency, on heavy capital inflow amid sale of dollars (by exporters and some banks), and despite flat equities and a firm dollar overseas.

Robust capital inflow was the main reason behind the rise in the rupee value, a dealer said.

Foreign institutional investors (FIIs) picked up shares worth over $1.2 billion in seven days since March 22.

The rupee premium for the forward dollar ended higher on fresh paying pressure from banks and corporates. The benchmark six-month forward dollar premium payable in September settled up at 149-151 paise from 145-147 paise last weekend.

The RBI has fixed the reference rate for the dollar at Rs 44.45 and the euro at Rs 63.01.

Call rate drops

Call rates dropped to end at 6.50 per cent at the overnight call money market on Tuesday due to lack of demand from borrowing banks.

The call money rate finished lower at 6.50 per cent from last weekend's 8.75 per cent. It moved in a wide range of 7.10 per cent and 5.75 per cent.

The RBI, under the Liquidity Adjustment Facility, purchased securities worth Rs 7,365 crore from 14 bids at the one-day repo auction at a fixed rate of 6.75 per cent.

Bonds firm up

The government bond prices firmed up on fresh buying support from banks and corporates. The 8.13 per cent government security maturing in 2022 shot up to Rs 100.57 from 100.32 previously, while its yield declined to 8.05 per cent from 8.09 per cent.

The 8.08 per cent government security maturing in 2022 hardened to Rs 100.17 from Rs 99.95, while its yield moved down to 8.05 per cent from 8.08 per cent.

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