Date:01/11/2005 URL: http://www.thehindubusinessline.com/2005/11/01/stories/2005110102140600.htm

Back Rupee ends lower; bond prices dip

Our Bureau

MUMBAI: The rupee closed lower against the dollar in a lacklustre market on Monday, ahead of a public holiday for Diwali.

The currency opened at 45.12 against the greenback and followed the movement of the euro, said dealers. It ended trade at 45.15, lower than Friday's close of 45.08.

The forward premia came down, with the 6-month closing at 0.4 per cent (0.42 per cent) and the one-year at 0.38 per cent (0.42 per cent).

Bond prices came down 5-10 paise in a market that saw low volumes. A dealer with a private bank said volumes were less than Rs 200 crore, as there was hardly any participation. The reaction to the market is subdued as dealers are awaiting an auction of Rs 8,000 crore that is expected later this week. The 7.27 per cent -9 year-2014 paper opened at Rs 102.58 (6.96 per cent YTM) and closed at Rs 102.50 (6.97 per cent YTM), against the earlier close of 102.57 (6.96 per cent YTM). The 10.25 per cent 16 year-2021 paper opened at Rs 125.60 (7.44 per cent YTM) and ended trade at Rs 125.52 (7.45 per cent), lower from the earlier level of Rs 125.62 (7.44 per cent YTM).

Call rates were unchanged at 5.25-5.3 per cent.

According to market players, Wednesday is likely to see more action following the meeting of the US FOMC committee, which is scheduled to meet on Tuesday. If prices fall further 15-20 paise from these levels, value buying is likely, said a dealer.

In the two-day reverse repo, under the liquidity adjustment facility, the RBI received and accepted 21 bids amounting to Rs 10,840 crore. In the CBLO market, there were 320 trades for Rs 13,338.95 crore in the rate range of 5.21-5.70 per cent.