Rupee continues to lose ground
Rupee continued to lose ground, trading at 49.01 against the dolllar at 3pm, down 14 paisa from Friday.
By ET Bureau |
MUMBAI: The rupee continued to lose ground on Monday, trading at 49.01 against the dolllar at 3pm, down 14 paisa from Friday. Dealers said that trading was very lacklustre with low volumes. The more than 3% drop in the stock market renewed worries of foreign fund outflows while a stronger dollar overseas also weighed on the local unit. The rupee had closed at 48.87 on Friday.
"Trade is likely to remain in a range of 48.90 and 49.15 against the dollar," says Navin Raghuvanshi, associate vice-president, foreign exchange trading at DCB Bank. "Dollar is trading strong against major global currencies and by this logic, the rupee should have actually traded still weaker," he said. BSE sensex was down 3.3% to trade at 9092.
Ten -year bonds rose despite uncertainities about further announcement of additional borrowings. Dealers are hopeful that yields at the highest level in three weeks could attract new investors. Banks and primary dealerships may have increased purchases after benchmark yields increased by a record 92 basis points last month. The government sold a new 10-year bond at 6.05% on Friday.
The yield on the 6.05% note due January 2019 fell 10 basis points to 5.81% as of 3pm. It had ended Friday at 5.91%. Althoug RBI's indicative calendar shows the government is scheduled to sell bonds for Rs 7,000 crores between February 6-9, it did not announce any auction for this week. This has brought some cheer in the market. However a dealer at ICICI Securities said that volumes in the new benchmark paper remains low and will pick up after further auctions of the same paper are completed.
Liquidity was comfortable with call money trading at 4.25% at 2 30pm, near the reverse repo rate, as per CCIL.
"Trade is likely to remain in a range of 48.90 and 49.15 against the dollar," says Navin Raghuvanshi, associate vice-president, foreign exchange trading at DCB Bank. "Dollar is trading strong against major global currencies and by this logic, the rupee should have actually traded still weaker," he said. BSE sensex was down 3.3% to trade at 9092.
Ten -year bonds rose despite uncertainities about further announcement of additional borrowings. Dealers are hopeful that yields at the highest level in three weeks could attract new investors. Banks and primary dealerships may have increased purchases after benchmark yields increased by a record 92 basis points last month. The government sold a new 10-year bond at 6.05% on Friday.
The yield on the 6.05% note due January 2019 fell 10 basis points to 5.81% as of 3pm. It had ended Friday at 5.91%. Althoug RBI's indicative calendar shows the government is scheduled to sell bonds for Rs 7,000 crores between February 6-9, it did not announce any auction for this week. This has brought some cheer in the market. However a dealer at ICICI Securities said that volumes in the new benchmark paper remains low and will pick up after further auctions of the same paper are completed.
Liquidity was comfortable with call money trading at 4.25% at 2 30pm, near the reverse repo rate, as per CCIL.
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