Date:12/05/2005 URL: http://www.thehindubusinessline.com/2005/05/12/stories/2005051202050600.htm

Back Rupee breaches 43.30; bond prices move up

Our Bureau

MUMBAI: The rupee substantially strengthened against the US dollar and moved beyond the psychological 43.30 level as speculation on the revaluation of the Chinese yuan once again hit the market. Dealers said the rupee had previously touched this level more than five years ago.

The rupee opened at 43.39 and moved up to 43.28/29andclosed the day at 43.28/29, up by about 15 paise from Monday's close at 43.44

In the forward premia market, there was a drop as the 12-month premium closed at 1.3 per cent (1.4) and the 6-month premium closed at 1.5 per cent (1.62).

Bond prices saw an upward movement as news of the appreciation of the rupee filtered in. Dealers said that since the State loan auction of Rs 7,300 crore was declared yesterday, there was also some buying interest in the market.

The currently active 7.55-5 year-2010 paper opened at Rs 102.85 (6.87 per cent YTM), saw a high of Rs 102.97 (6.84 per cent YTM) and closed the day at Rs 102.95/97 (6.84 per cent YTM). On Tuesday, it had closed at Rs102.85.

The 8.07-12 year-2017 paper opened at Rs 104.70 (7.46 per cent YTM) and ended at Rs 104.97, up from yesterday's close at Rs 104.85 . The 7.38-10 year-2015 benchmark paper opened at Rs 101.20 (7.21 per cent YTM) and closed at Rs 101.30/35 against Tuesday's Rs 101.25.

Call rates closed between 4.95-5.05 per cent. In the one-day reverse repo under the liquidity adjustment facility, RBI received and accepted 32 bids, amounting to Rs 17,410 crore. The CBLO market saw 146 trades amounting to Rs 6,118.65 crore in the rate range of 4.87-5.00 per cent.