Date:19/02/2005 URL: http://www.thehindubusinessline.com/2005/02/19/stories/2005021902310600.htm

Back Rupee weakens; bond prices flat

Our Bureau

MUMBAI: The rupee closed around four paise weaker against the greenback at 43.84/85 per dollar in the forex market on Friday, against Thursday's closing at 43.80/81.

Dealers said although major international currencies had rallied against the US dollar over the past couple of days, the dollar retained its strength against the rupee, due to the fact that the latter was deemed overvalued.

The rupee opened at 43.79/80 and got dealt to a high of 43.77 before settling lower at its closing.

In the forwards market, the six-month premium ended at 1.69 per cent (1.70 per cent) with the one-year premium ending at 1.46 per cent (1.42 per cent).

Bond prices were up on expectations of lower inflation in the initial part of the day, but came down by 20 paise across maturities on some profit booking, post announcement of the inflation figures. The ten-year benchmark paper the 7.38 per cent 2015 paper opened at Rs 106.95 and dropped down to Rs 106.70/75 levels.

Call rates inched up to as high as 5 per cent levels in the wake of increased inter-bank borrowings on reporting Friday, according to dealers.

In the three-day reverse repo under the LAF, RBI received and accepted 51 bids amounting to Rs 25,965 crore at the rate of 4.75 per cent.