Date:15/03/2005 URL: http://www.thehindubusinessline.com/2005/03/15/stories/2005031502470600.htm

Back Rupee firm; gilts weak

Our Bureau

MUMBAI: The rupee closed at 43.56 on Monday per dollar, almost unchanged from its previous closing levels, in a lacklustre forex market.

Dealers said, after opening at 43.55/56, the domestic currency got dealt up to an intra-day high of 43.50, at which point State-run banks bought dollars, bringing the rupee down a notch at closing.

"The market is flush with dollar inflows and the dollar's weakness against global currencies is keeping the rupee propped up. State-run banks keep buying to keep the dollar protected at various levels," said a dealer with a private sector bank.

In the forwards market, the six-month premium closed at 1.47 per cent (1.51 per cent) while the one-year premium closed unchanged from Friday's levels at 1.30 per cent.

Bond prices fell by around 20 paise amid thin volumes in a dull government securities market.

The benchmark 10-year paper, the 7.38 per cent 2015, closed at Rs 106 (6.57 per cent YTM), as against its previous levels at Rs 106.19 (6.55 per cent YTM).

Call rates fell to as low as two per cent in the inter-bank market, before closing at 4.80 per cent. "There were too many lenders and few borrowers and the market was amply liquid," said a dealer.

In the one-day reverse repo under the LAF, RBI received and accepted 49 bids amounted Rs 34,330 crore.