Date:05/01/2005 URL: http://www.thehindubusinessline.com/2005/01/05/stories/2005010501660600.htm

Back Rs 7,000 cr T-bills oversubscribed

Our Bureau

MUMBAI: The Rs 7,000 crore worth auctions for the 9.39 per cent 2011 paper and the 7.50 per cent 2034 paper were oversubscribed in the domestic debt market on Tuesday. Their cut-off prices, at Rs 115.02 and Rs 104.80 respectively, were higher than market expectations, dealers said.

The 9.39 per cent 2011 paper received 426 competitive bids amounting to Rs 17,223 crore, of which 114 bids amounting to Rs 4,935 crore were accepted. Twelve non-competitive bids worth Rs 64.174 were received and accepted. Underwriting accepted from primary dealers was at Rs 3,780 crore.

The 7.50 per cent 2034 paper received a total of 190 competitive bids amounting to Rs 5,835 crore, of which 87 bids amounting to Rs 1,936 crore were accepted. Fifteen Non-competitive bids worth Rs 63.73 crore were received and accepted. Amount underwritten by primary dealers was Rs 1,830 crore.

Bond prices rallied by around 30-35 paise across maturities in the domestic debt market on account of adequate liquidity in the system. The ten-year benchmark paper, the 7.38 per cent 2015 paper was quoted at Rs 106.90 6.47 per cent YTM- as against its previous closing levels at Rs 106.40 -6.53 per cent YTM-.

Call rates remained easy between 4.25 per cent and 4.50 per cent in the inter-bank market. In the one-day reverse repo under LAF, RBI received and accepted 51 bids amounting to Rs 40,640 crore at the rate of 4.75 per cent.

The domestic currency closed around five paise weaker on Tuesday ending at 43.53/54 per dollar as against its closing at 43.48/49 on Monday.

After opening at 43.52/54 levels, the domestic currency touched an intra-day high of 43.41 on the back of good dollar supplies, dealers said. However, a round of dollar buying across the board, by banks who were sitting on short dollar positions drove the rupee down a few notches at its close.

In the forwards market, the six-month premium ended at 1.78 per cent (1.69 per cent), while the one-year premium ended at 1.35 per cent (1.30 per cent).