Re loses 20 paise, call rates remain high
The rupee shrugged off early gains on Monday to end the day 20 paise lower than its previous high.
By TNN |
MUMBAI: The rupee shrugged off early gains on Monday to end the day 20 paise lower than its previous high. The rupee ended the day at 39.54/55 against the dollar, falling from Friday’s close of 39.34/35.
Weak cues from local and other Asian stock markets, and a rising dollar had their effect on the rupee, which had risen to 39.34 levels in early trade on the account of foreign capital inflows and a private sector bank selling about $600 million.
“There was consistent buying of dollars through the day by most banks and also signs of central bank intervention, in an attempt to stem the rupee’s rise,” said a trader from a private bank. The main factor affecting the rupee’s fall was the tanking of the Sensex, which ended 769 points in the red. Also, the dollar went up against major international currencies, buoyed by positive US-inflation data.
Forward premia, on the other hand, showed a mixed trend, with the one-month contract rising to 2.77% (2.69%), while rates on the six-month contract slipped to 1.98% (2.02%) and the annual contract rose to 1.40% (1.39%).
Meanwhile, yields in the bond market eased out on hopes that the liquidity crunch will ease out in the coming week, in spite of advance tax payouts. The yield on the 10-year benchmark bond ended the day at 7.89%, down from Friday’s close of 7.90%.
Though advance cash payouts will suck out up to Rs 3,500 crore from the system, dealers are confident that this will be offset by treasury-bill redemptions this week. Dealers have been cautious and nobody is prepared to take up fresh positions, said a dealer.
At the Reserve Bank of India’s liquidity adjustment facility, one bid worth Rs 5 crore was placed for the reverse repo auction, which was mopped up, while the central bank infused Rs 85 crore though its repo auction.
Rates on the inter-bank call market continued to remain high, and touched the 7.80%-mark. Call rates ended the day at 6.75%, after transactions worth Rs 12,848 crore were carried out. The intra-day low was recorded at 6%. Repo borrowing rates ended the day at 6%, after deals worth Rs 16,823 crore were struck. Earlier, the rates had opened at 7.80%, and rose to an intra-day high of 7.85%.
Weak cues from local and other Asian stock markets, and a rising dollar had their effect on the rupee, which had risen to 39.34 levels in early trade on the account of foreign capital inflows and a private sector bank selling about $600 million.
“There was consistent buying of dollars through the day by most banks and also signs of central bank intervention, in an attempt to stem the rupee’s rise,” said a trader from a private bank. The main factor affecting the rupee’s fall was the tanking of the Sensex, which ended 769 points in the red. Also, the dollar went up against major international currencies, buoyed by positive US-inflation data.
Forward premia, on the other hand, showed a mixed trend, with the one-month contract rising to 2.77% (2.69%), while rates on the six-month contract slipped to 1.98% (2.02%) and the annual contract rose to 1.40% (1.39%).
Meanwhile, yields in the bond market eased out on hopes that the liquidity crunch will ease out in the coming week, in spite of advance tax payouts. The yield on the 10-year benchmark bond ended the day at 7.89%, down from Friday’s close of 7.90%.
Though advance cash payouts will suck out up to Rs 3,500 crore from the system, dealers are confident that this will be offset by treasury-bill redemptions this week. Dealers have been cautious and nobody is prepared to take up fresh positions, said a dealer.
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At the Reserve Bank of India’s liquidity adjustment facility, one bid worth Rs 5 crore was placed for the reverse repo auction, which was mopped up, while the central bank infused Rs 85 crore though its repo auction.
Rates on the inter-bank call market continued to remain high, and touched the 7.80%-mark. Call rates ended the day at 6.75%, after transactions worth Rs 12,848 crore were carried out. The intra-day low was recorded at 6%. Repo borrowing rates ended the day at 6%, after deals worth Rs 16,823 crore were struck. Earlier, the rates had opened at 7.80%, and rose to an intra-day high of 7.85%.
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