Rupee ends at 39.55/56 vs dollar; slips 0.7%
The tremors of the Sensex’s 2,000-point intra-day plunge were felt in the foreign exchange market. The rupee, one of Asia’s best performing currencies in 2007, slipped 0.7% during the day.
By TNN |
MUMBAI: The tremors of the Sensex’s 2,000-point intra-day plunge were felt in the foreign exchange market. The rupee, one of Asia’s best performing currencies in 2007, slipped 0.7% during the day.
The rupee ended the day at 39.55/56 versus the dollar, after reaching a low of 39.60/ 61. It had closed at 39.29 levels on Friday.
Forex traders attributed the fall to foreign institutional investors pulling out from the stock market and causing multinational banks to make dollar purchases. Treasury managers ruled out the possibility of any intervention by the Reserve Bank of India on Monday.
Premia on forward contracts declined sharply, which traders feel was due to the central bank halting its intervention in the forward market. The yield on the one-month premia closed at 2.62% (2.83%). On the six-month premia, the yield closed at 1.74% (2.07%). The yield on the annualised premia closed at 1.43% (1.66%).
Meanwhile, in the government bond market, yields were seen inching towards a one-year low. Bond prices rose by around 10 paise, while the market saw trading volumes of around Rs 6,000 crore.
According to bond market traders, much of the trading was in the benchmark paper, the 7.99% bond maturing in 2017 and the longer-dated securities. The yield on the benchmark paper closed the day at 7.54%, a tad lower than the previous close.
Rates in the inter-bank call money market ended at 6.97% after rising to 7.50% levels during the day. Similarly, rates in the market for collateralised borrowing and lending obligations ended at 4%, while repo rates closed at 3.50%.
RBI mopped up bids worth Rs 595 crore at the facility for liquidity adjustment through reverse repo operations, but accepted one bid and lent funds worth Rs 2,000 crore through the repo window.
The rupee ended the day at 39.55/56 versus the dollar, after reaching a low of 39.60/ 61. It had closed at 39.29 levels on Friday.
Forex traders attributed the fall to foreign institutional investors pulling out from the stock market and causing multinational banks to make dollar purchases. Treasury managers ruled out the possibility of any intervention by the Reserve Bank of India on Monday.
Premia on forward contracts declined sharply, which traders feel was due to the central bank halting its intervention in the forward market. The yield on the one-month premia closed at 2.62% (2.83%). On the six-month premia, the yield closed at 1.74% (2.07%). The yield on the annualised premia closed at 1.43% (1.66%).
Meanwhile, in the government bond market, yields were seen inching towards a one-year low. Bond prices rose by around 10 paise, while the market saw trading volumes of around Rs 6,000 crore.
According to bond market traders, much of the trading was in the benchmark paper, the 7.99% bond maturing in 2017 and the longer-dated securities. The yield on the benchmark paper closed the day at 7.54%, a tad lower than the previous close.
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Rates in the inter-bank call money market ended at 6.97% after rising to 7.50% levels during the day. Similarly, rates in the market for collateralised borrowing and lending obligations ended at 4%, while repo rates closed at 3.50%.
RBI mopped up bids worth Rs 595 crore at the facility for liquidity adjustment through reverse repo operations, but accepted one bid and lent funds worth Rs 2,000 crore through the repo window.
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