Date:21/10/2005 URL: http://www.thehindubusinessline.com/2005/10/21/stories/2005102102230800.htm

Back Rupee slips further; bonds bearish

Our Bureau

MUMBAI: The rupee further slipped against the greenback on Thursday ,sparking demand from importers.

The domestic currency opened at 45.16/17 and touched a low of 45.20/21. It then appreciated to 45.13/14 but closed the day at 45.23/24. On Wednesday, it had closed at 45.16.

Dealers said that most of the Asian currencies were under pressure against the dollar.

"Globally, a gaining dollar and rising US interest rates and domestically, the fall in the stock market are creating demand for dollars. There is fear of FII outflows", said a trader.

Dealers also said that there could have been some RBI intervention in the market, with PSU banks selling dollars.

In the forward market, the 12-month premium ended at 0.47 (0.49) and the 6-month at 0.5 per cent (0.54).

In the bond market, prices opened lower but moved up slightly during the day. Dealers said that sentiment in the bond market was bearish and there was no buying support. Volumes were thin at Rs 750 crore.

The 10.25-16 year-2021 opened at Rs 124.86 (7.52 per cent YTM) and closed at Rs 124.97 (7.51 per cent YTM), almost the same level as Wednesday's Rs 124.98 (7.51 per cent YTM). The 7.37-9 year-2014 paper opened at Rs 101.86 (7.07 per cent YTM) and closed at Rs 101.91 (7.06 per cent YTM), lower than Wednesday's close at Rs 101.95 (7.06 per cent YTM).

The call rate closed at 5-5.05 per cent. In the one day reverse repo, under the liquidity adjustment facility, RBI received and accepted 31 bids amounting to Rs 17,220 crore in the one-day reverse repo auction. In the CBLO market, there were 252 trades for Rs 13,562.70 crore in the rate range of 4.94-5.10 per cent.