Date:22/10/2005 URL: http://www.thehindubusinessline.com/2005/10/22/stories/2005102202660600.htm

Back Rupee recovers; bond prices up

Our Bureau

MUMBAI: The rupee recovered some of its previous losses against the dollar on Friday in tandem with the appreciation of the euro and buoyancy in the stock markets.

The domestic currency opened the day at 45.14/17 and firmed up to 44.98/99. It closed the day slightly lower at 45.06/07, up from Thursday's close at 45.23/24.

Dealers said that the strengthening of the euro to $1.2070 caused the rupee to appreciate. The euro, however, dipped to $ 1.20 driving the rupee slightly down.

In the forward market, the 12-month ended at 0.49 per cent (0.47) and the 6-month at 0.50 per cent (0.5).

In the bond market, the mood was bullish after a long bearish phase. Prices rose by 25-50 paise and the traded volume was at Rs1,440 crore.The recovery of the rupee was a positive trigger for the bond market. A dealer at a private bank said that globally, the easing of the price of crude to $60 and a fall in US yields from 4.48 per cent YTM to 4.43 per cent YTM also aided the domestic bond market.

The 7.37- 9 year - 2014 paper opened at Rs 102.04 (7.045 per cent YTM) and closed at Rs 102.275 (7 per cent YTM), up from Thursday's close at Rs 101.91 (7.06 per cent YTM). The 10.25-16 year-2021 paper opened at Rs 125.97 (7.41 per cent YTM) and ended at Rs 125.42 (7.46 per cent YTM), higher than Thursday's close at Rs 124.97 (7.51 per cent YTM). The 7.38-10 year-2015 paper was dealt at 7.13 per cent YTM.

The call rate closed at 5.05-5.10 per cent (5-5.05). In the three-day reverse repo, under the LAF, RBI received and accepted 28 bids amounting to Rs 15,980 crore. In the CBLO market, there were 258 trades for Rs 12,265.60 crore in the rate range of 4.90-5.48 per cent.