Call ends at 7 %, rupee closes at 44.54/$

Mumbai March 23 | Updated: Mar 24 2006, 05:30am hrs
The prices of government securities moved in the upward direction on Thursday due to the expectation that the liquidity crunch prevailing in the system would ease soon. However, some bond players were cautious while taking fresh position ahead of announcement of government borrowing. The prices of the securities were up by 10 to 12 paise among all the maturities.

Among the actively traded securities, 8.07% government security maturing in 2017 ended the trading session at Rs 105.08 with corresponding yields ruling at 7.38 % as compared to previous close of Rs 105 (7.39%). While, 9.39% government stock maturing in 2011 ended at Rs 109.65 with corresponding yield at 7.16% as against the previous close of Rs 109.405 (7.21%).

Today the volumes in the market were very good, some player showed buying interest. Basically the players are expecting the liquidity situation to ease up. However, some players are cautious towards the announcement of auction calendar by government, said a dealer from private bank.

Meanwhile, on the inter bank call money market the call rates ended at 6.7-6.9%, on Thursday, with liquidity still under scanner. The RBI in its first LAF infused Rs 15,315 crore through its repo auction window and absorbed Rs 100 crore by way of reverse repo mechanism. While in the second LAF RBI has injected Rs 4,965 crore, at a rate of 5.5% and mopped Rs 1240 crore at rate of 6.5%.

The domestic currency ended weak on Thursday, on account of heavy dollar buying by the state run bank considered on behalf of the reserve bank of India. The rupee ended at 44.5450/5500 per dollar down from 44.5150/5200 at Wednesdays close.

Today the state run banks were again seen buying dollar, probably on behalf of the Reserve Bank of India. There was good movement in the rupee today, said a forex dealer from private sector bank.

According to market observers, the rupee had ticked lower when Sonia Gandhi said that she was resigning as a Member of Parliament and a key advisory body after charges she violated the constitution by holding both posts.

However, the buying of dollar from state banks was the key reason for the rupee weakening on Thursday. On the forward market front, the annualised dollar premium fell on Thursday.