Date:05/11/2005 URL: http://www.thehindubusinessline.com/2005/11/05/stories/2005110502600600.htm

Back Rupee falls 20 p; bonds listless

Our Bureau

MUMBAI: The rupee fell by about 20 paise against the dollar on Friday due to heavy demand for the greenback.

The domestic currency opened at 45.38/39 and closed at 45.52/53, a one year low against the dollar. On Thursday, it had ended at 45.30.

Dealers said that there was heavy demand for dollars from importers who were sitting on unhedged positions as well as exporters who were cancelling forward contracts, anticipating a further depreciation in the rupee.

In the forward market, the 12-month premium closed at 0.36 per cent and the 6-month premium at 0.39 per cent.

In the bond market, volumes were thin at Rs 300 crore since there were not many traders due to the festive season. Dealers said the market was bearish in the earlier half of the day because the US yields had risen to 4.66 per cent. Lower liquidity was also a concern, but dealers attributed it to the high demand during the festive season.

The 7.37 - 9 year 2014 paper opened at Rs 102.5125 (6.97 per cent YTM) and closed at Rs 102.50 (6.97 per cent YTM), lower than Thursday's Rs 102.59 (6.96 per cent YTM).

The 10.25 - 16 year 2021 paper opened at Rs 125.51 (7.45 per cent YTM) and ended at Rs 125.53 (7.45 per cent YTM), down from Thursday's close at Rs 125.59 (7.44 per cent YTM).

The call rate closed at 6 per cent (5.30). In the three-day reverse repo, under the liquidity adjustment facility, the RBI received and accepted 17 bids amounting to Rs 6,785 crore. In the CBLO market, there were 282 trades for Rs 11,029.70 crore in the rate range of 5.32-6.10 per cent.