The rupee closed at 43.79/80 per dollar, as against Tuesdays close of 43.73. Robust inflows from the foreign investment buoyed the rupee to a session high of 43.7350. Strong inflows from a big banks recent ADR issue saw the rupee to trade in both ways, said a dealer at a state-run bank.
The yields on forward premium ended almost flat on Wednesday. The six-month annualised premium edged by one basis point to 1.51%, while the 12-month premium closed unchanged at 1.37%
Meanwhile, call rates hovered around 4.60-4.85% at the overnight call money market on Wednesday, on the back of ample loose liquidity in the system.
The rates opened at around 4.60-4.80% with most of the trades done in the region of 4.70-4.80%. There were some stray deals struck at 4.90%, dealers said. Although advance tax outflows put brakes on liquidity, there is no cash crunch in the system, said a primary dealer.
The Reserve Bank of India (RBI) accepted 27 bids aggregating Rs 18,550 crore at the one day fixed rate reverse repo auction at a fixed rate of 4.75%, under the liquidity adjustment facility (LAF).
The government bonds recouped losses after the first few deals were struck at 6.76% as against previous days close of 6.72%. The bonds opened weak on account of US Feds outlook on uncertainty of the interest rates, which is likely to raise by 25 basis points.
The benchmark 7.38% 2015 stock fell by six paise to Rs 104.83/87 with the yield inching up by a single basis point to 6.73% and the 7.37% 2014 bond moved down to Rs 103.70/80 as against the previous close of Rs 103.90/104.00.
Key gilts across the spectrum fell by 5-25 paise in a range-bound trade in the run-up to the end of the fiscal, said dealers.
In a lacklustre market, the 10 year benchmark stock recovered on the back of some renewed selling in the afternoon deals.
A 25 basis points rise in the US funds rate to 2.75% partly weighed on bond values. Fears that global interest rate were headed higher, could trigger a rise in domestic rates, dealers said. Firm global oil prices at $56.56 per barrel in Asian trade also exerted downward pressure on bonds, they added.