Date:31/08/2004 URL: http://www.thehindubusinessline.com/2004/08/31/stories/2004083102270800.htm

Back Rupee tad weaker; bond prices drop

Our Bureau

MUMBAI: The rupee closed marginally weaker at Rs 46.3650/37 against the dollar on Monday, as against Friday's closing at Rs 46.30.

Dealers said the domestic currency lost ground on demand for dollars from oil companies and other corporates.

After opening at Rs 46.32/33 per dollar, the rupee touched an intra-day low of Rs 46.38 in late morning deals. However, a bout of dollar selling from State-run banks propped up the currency to its closing levels, dealers said.

Forwards eased marginally with the six-month premium ending at 2.45 per cent (2.48 per cent) and the premium for one year ending at 2.08 per cent (2.16 per cent).

Bond prices lost close to a rupee across maturities over concerns of high inflation and rising interest rates compounded by a hike in State Bank of India's housing loan rates.

The 7.38 per cent 2015 opened at Rs 109.50 and plunged to Rs 108.75, while the 10 year benchmark, the 7.37 per cent 2014 paper, opened at Rs 109.60 and closed lower at Rs 108.65, with a yield to maturity at 6.14 per cent (6.05 per cent during opening levels).

Call rates remained in the range between 4.25 per cent and 4.50 per cent levels in the inter-bank market. In the CBLO market, 131 trades were transacted to the tune of Rs 3,449.25 crore.

In the seven-day repo and one-day repo under the LAF, the RBI received and accepted 15 bids amounting to Rs 5,275 crore and 49 bids amounting to Rs 30,720 crore, respectively, at the rate of 4.50 per cent each.