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MUMBAI: The spot rupee was volatile on against the dollar on Wednesday on fears of a hike in interest rate, but it ended unchanged as compared to Tuesday's close.

The rupee opened at 44.97/99 and touched a low of 45.07 and a high of 44.93, before ending at 45.06/07, the same as the previous close of 45.06/07.

The demand for the dollar was largely from oil companies, said dealers.

There was dollar buying at the higher levels and selling at the lower levels and this caused volatility in the market, said a dealer with a private bank.

The six-month premium closed at 0.50 per cent (0.56 per cent) and the one-year at 0.46 per cent (0.51 per cent).

Overseas, currencies such as euro and pound opened higher against the dollar, but later there was some correction, said the dealer.

Bond prices went up for the second day in a row following the announcement of the monetary policy.

The market viewed the rate hike as a measure to control inflation, said a dealer with a private bank. Prices went up by about 15-25 paise.

The 7.37-9 year-2014 paper opened at Rs 102.5 (6.97 per cent YTM) and closed at Rs 102.56 (6.96 per cent YTM), higher than Tuesday's level of closed at Rs 102.47 (6.98 per cent YTM).

The 10.25 per cent - 16 year- 2021 paper opened at Rs 126.5 (7.36 per cent) and closed at Rs 125.66 (7.44 per cent YTM), higher than the previous close of Rs 125.53 (7.45 per cent YTM).

Call rates opened at 5.25 per cent following the 25 bps hike in reverse repo and repo rates. It traded between 5.25-5.30 per cent during the day (5.25 per cent).

In the one-day reverse repo, under the liquidity adjustment facility, the RBI received and accepted 37 bids amounting to Rs 19,205 crore.

In the CBLO market, there were 309 trades for Rs 13,787 crore in the rate range of 4.15-5.25 per cent.

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