Date:08/12/2005 URL: http://www.thehindubusinessline.com/2005/12/08/stories/2005120802790600.htm

Back Rupee sheds 5 paise; securities decline

Our Bureau

MUMBAI: The rupee was a tad lower against the dollar on Wednesday on the back of heavy dollar demand.

The domestic currency opened at 46.13/15 and touched an intra-day high of 46.08. It, however, dipped to end at 46.23/24, lower than Tuesday's close at 46.1850/1950.

Dealers said the domestic currency was volatile against the dollar because the current sentiment is towards a weak rupee.

"The rupee appreciated against the dollar on the back of supply. However, heavy corporate demand for the greenback pulled it down," said the chief dealer at a private bank.

In the forward premia market, the 6-month ended at 0.84 per cent (0.8) and the 12-month was unchanged at 0.65 per cent.

In the bond market, prices rose initially but retraced some of the gains towards closing. Dealers said after the Rs 8,000-crore auction on Tuesday, there was buying interest in the market. The easing of the US treasury yields was also viewed favourably in the bond market. However, profit-booking caused the prices to fall from their intra-day high.

"The market is now taking a day-to-day view rather than a long-term view," said a dealer.

The recently auctioned 8.07-12 year-2017 paper opened at Rs 106.43 (7.22 per cent YTM) and closed at Rs 106.33 (7.23 per cent YTM). The 10.25-16 year-2021 paper opened at Rs 126.25 (7.38 per cent YTM) and closed at Rs 126.29 (7.37 per cent YTM), lower than Tuesday's Rs 126.16 (7.385 per cent YTM).

The call rate closed at 5.25-5.3 per cent (5.30-35). In the first one-day reverse repo auction, the Reserve Bank of India received and accepted 15 bids amounting to Rs 13,500 crore. In the second auction, it received and accepted 11 bids for Rs 4,030 crore.

In the CBLO market, there were 252 trades for Rs 12,409.5 crore in the range of 5.2-5.4 per cent.