Re cuts losses, bonds seen range-bound
The rupee trimmed some of its losses on Monday to end at 48.87 against the dollar, as banks sold dollars.
By ET Bureau |
MUMBAI: The rupee trimmed some of its losses on Monday to end at 48.87 against the dollar, as banks sold dollars. However, the rupee failed to rally strongly because of the dollar strengthening against other major currencies internationally.
Bonds closed largely unchanged on nervousness over the government���s borrowing programme. This was despite ample liquidity with banks parking close to Rs 48,000 crore of surplus funds with the RBI. Despite concerns of the government overshooting its borrowing target, dealers are hopeful that yields, which are at 3-week high, will soon attract new investors. Banks and primary dealerships may have increased purchases after benchmark yields increased by a record 92 basis points last month.
The yield on the 6.05% note due January 19 fell 1 basis point to 5.90%. A dealer at ICICI Securities Primary Dealership said volumes in the new benchmark paper remains low and will pick up after further auctions of the same paper are completed. ���Overall, the volumes were medium and we feel bonds will continue to perform rangebound,��� said the dealer.
Seven Indian states plan to sell a total of Rs 4,750 crore of 10-year debt on Thursday, RBI said last week. The federal government will offer to sell Rs 9,500 crore of treasury bills at a weekly auction on Wednesday. Dealers said trading in rupee was lacklustre with low volumes. The local unit closed at 48.87 on Friday.
Navin Raghuvanshi, associate vice-president, foreign exchange trading at DCB Bank, said the dollar was trading strong against major global currencies and by this logic, the rupee should have actually traded still weaker. But late liquidation of long dollar positions by banks gave a upward push to the local unit.
BSE Sensex was down 3.8% to trade at 9,066. Indian overnight call money rates ended slightly higher on Monday. But they ended at 4.15%, near the reverse repo rate, as per CCIL.
Bonds closed largely unchanged on nervousness over the government���s borrowing programme. This was despite ample liquidity with banks parking close to Rs 48,000 crore of surplus funds with the RBI. Despite concerns of the government overshooting its borrowing target, dealers are hopeful that yields, which are at 3-week high, will soon attract new investors. Banks and primary dealerships may have increased purchases after benchmark yields increased by a record 92 basis points last month.
The yield on the 6.05% note due January 19 fell 1 basis point to 5.90%. A dealer at ICICI Securities Primary Dealership said volumes in the new benchmark paper remains low and will pick up after further auctions of the same paper are completed. ���Overall, the volumes were medium and we feel bonds will continue to perform rangebound,��� said the dealer.
Seven Indian states plan to sell a total of Rs 4,750 crore of 10-year debt on Thursday, RBI said last week. The federal government will offer to sell Rs 9,500 crore of treasury bills at a weekly auction on Wednesday. Dealers said trading in rupee was lacklustre with low volumes. The local unit closed at 48.87 on Friday.
Navin Raghuvanshi, associate vice-president, foreign exchange trading at DCB Bank, said the dollar was trading strong against major global currencies and by this logic, the rupee should have actually traded still weaker. But late liquidation of long dollar positions by banks gave a upward push to the local unit.
BSE Sensex was down 3.8% to trade at 9,066. Indian overnight call money rates ended slightly higher on Monday. But they ended at 4.15%, near the reverse repo rate, as per CCIL.
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