Call rates close at 5.5%, Re appreciates

Mumbai, Jan 5 | Updated: Jan 6 2006, 06:02am hrs
Taking the support of improved liquidity condition, the government securities inched up on Thursday. Moreover, the players were also cautious due to the uncertainty in the crude oil prices globally.

However, the bond players reacted positively to the fresh borrowings worth Rs 10,000 crore which was scheduled on Monday. According to the analyst the bond participants are positive about the auction as this is the only government issuance for the month and even the liquidity conditions are further expected to ease.

The benchmark 7.38% government stock maturing in 2015 ended untraded with the corresponding yields ruling at 7.06%. Among the actively dealt securities, the 8.07% government stock maturing 2017 inched up to Rs 106.75 with the yields ruling at 7.17%, as against its previous close at Rs 106.65 giving the yield of 7.19%.

Towards the longer tenure the 10.25% government stock maturing in 2021 ended up at Rs 126.70 with the corresponding yields ruling at 7.32% as against previous close of Rs 126.65 (7.33%).

At the opening of the trading session prices were seen moving down due to the increase in crude oil prices. However, later some profit booking was seen, said a dealer from a private sector bank.

At the overnight call money market, the call rates ended at 5.5%-5.60% with the sustainable liquidity in the system. This could be evinced from the Reserve Bank of Indias (RBI) LAF data.

In the first LAF, the RBI mopped up Rs 500 crore through a reverse repo auction. In the second LAF, Rs 2,855 crore was mopped up at rate of 5.25%.

Taking support from the strong foreign funds inflow in the local stock market the domestic currency ended stronger than previous days close. The rupee ended at ended at 44.70/71 per dollar, 0.18% stronger than Wednesdays 44.78/79 close. The domestic currency reached a intra day high of 44.62.

The rupee managed to appreciate due to the strong FII inflows, it has also got support from the dollar condition overseas. Moreover, huge demand for dollar was seen from the oil importers, said a forex dealer from a private sector bank.

In the forward market, premias rose with the six-month annualised dollar premium closing at 1.22% as against its previous close at 1.11%, the twelve-month annualised dollar premium ended at 0.95% as against its previous close at 0.87%.