Date:30/12/2004 URL: http://www.thehindubusinessline.com/2004/12/30/stories/2004123001410600.htm

Back Rupee unchanged; bond prices lower

Our Bureau

MUMBAI: The rupee ended on Wednesday at 43.70/71 against the dollar, more or less unchanged from the previous closing level of 43.70/72.

The currency opened weaker at 43.80 per dollar as the greenback had made gains in the overseas market against the euro and other major currencies.

Demand for dollars from corporates drove the home currency down in the morning. but in the later hours dollar inflows propped up the rupee. Exporters and foreign investors were selling dollars in the forex market, dealers said.

Forward premia moved up -- the six-month annualised premium ended at 2.02 per cent (1.90 per cent) and the one-year at 1.43 per cent (1.36 per cent).

In the bond market, prices finished at levels lower than previous closing levels after trading in a 20-25 paise range through the day.

Expectation of a revision in MSS limit drove down the prices, which recovered later as there was no decision to revise the limit. However, market players expect cancellation of a government securities auction scheduled in January. A meeting held today for continuous review of cash and budget management did not take a decision on revision of government borrowing programme.

The 7.38 per cent 2015 paper ended at Rs 106.50 at a yield of 6.53 per cent, higher than previous close at 6.51 per cent. The 7.55 per cent 2010 paper closed at Rs 105.50 at a yield of 6.32 per cent.

The cut-off yield at the Rs 2,000 crore 91-day Treasury bill auction was set at 5.41 per cent (5.49 per cent).

Call rates in the inter-bank market were on the higher side in a range of 5.85 - 6.10 per cent. Under the LAF window RBI accepted 6 bids worth Rs 425 crore in the one-day reverse repo auction while it accepted the two bids aggregating Rs 210 crore in the one-day repo auction. In the CBLO market 133 trades worth Rs 6,500 crore were transacted.