Financial Daily from THE HINDU group of publications
Saturday, Mar 08, 2003
Financial Daily from THE HINDU group of publications Saturday, Mar 08, 2003 |
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Money & Banking
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Forex Rupee slips; gilts recover Our Bureau
Mumbai: THE rupee closed lower on Friday at 47.6500/6550 against the dollar as compared to Thursday's close of 47.6250/6300 in an actively traded forex market. There was good dollar buying by banks, which caused the domestic currency to weaken. "Banks were seen buying dollars in the spot due to demand in the forwards,'' said a forex dealer. The central bank was seen intervening to prevent further dip in the rupee by selling greenbacks from its vault at 47.69 levels, said a forex dealer in a private-sector bank. The rupee opened at 47.6250/6300, touched an intra-day high of 47.6200 and an intra-day low of 47.6900 against the dollar. In the forwards market, the premia moved up intra-day but closed lower. The six months premium closed at 3.50 per cent (3.49 per cent) and the one-year premium was at 3.30 per cent (3.22 per cent). The Government securities market was thinly traded and the g-sec prices came down close to Rs 2. Prices were on a downward spiral, falling at the rate of 10-20 paise from one trade to the next, said a dealer in a primary dealer. However, in the latter half of the trading day, there was slight recovery in prices following the lower yield on the State loan sale of Rs 5,753 crore at 6.75 per cent. This is the second tranche of the State loan sale, the first tranche was held in end-February at 6.95 per cent yield. The ten-year benchmark paper, 9.81 per cent 2013 paper closed at Rs 125.10 with a yield of 6.42 per cent after opening at Rs 126.85. Liquidity in the market was tight, with call rates in the range of 6.00-6.50 per cent in the inter-bank call money market. Through the LAF, there was a reverse repo bid, a signal of dearth of liquidity. The bid was accepted at 7.10 per cent for Rs 35 crore and 5 bids accepted worth Rs 1,875 crore through the repo window at the rate of 5 per cent.
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