The Hindu Business Line : Rupee steady; bonds recover

MUMBAI: The rupee ended at 46.47/48 against the dollar on Friday, unchanged from its previous closing levels, even as bond prices recovered lost gains across maturities.

The domestic currency scraped an intra-day low of 46.52 on the back of sustained dollar demand.

"Early morning demand from importers, oil corporates and State-run banks drove down domestic currency to the day's low, but bout of selling by nationalised banks perhaps at the behest of the central bank at 46.50/52 pushed it up to 46.34/35", said a dealer with a private sector bank.

The six month forward ended at 2.60 per cent (2.76 per cent) while the 12 month forward ended at 2.05 per cent (2.08 per cent).

Bond prices moved up by over a rupee after plummeting for two straight sessions. Yield on the ten-year benchmark eased to 6.16 per cent from the sixteen month high of 6.28 per cent reached on Thursday.

The 7.37 per cent 2014 paper ended at Rs 108.00 off from gains during the day when it had touched Rs 108.75. The price has risen from opening levels of Rs 107.20. The 11-year benchmark rose by almost a rupee to end the day at Rs 108.70.

Soothing comments from the RBI Deputy Governor, Mr Rakesh Mohan, saying inflation could ease with evidence of commodity prices dropping helped bond prices recover , said dealers. "Underlying sentiment is still bearish as this seems a temporary respite from the fall in prices," said a dealer with a private sector bank. Inter-bank call rates were in the range of 4.00-4.25 per cent. Under the LAF window, the RBI received and accepted 32 bids worth Rs 7,295 crore.