G-Sec prices dip, rupee ends down

Mumbai, Nov 18 | Updated: Nov 19 2005, 06:28am hrs
Prices of government securities edged on Friday after the finance minister said that government would go ahead with its scheduled borrowing. The prices have dipped by 4-5 paise from the Thursdays closing levels. The countrys inflation data was released on Friday. The inflation rate which was however lower than a expected rate at 4.18. The benchmark 7.38% government stock (2015) closed at Rs 102.03 with corresponding yields ruling at 7.085%. The highly traded 7.37% government stock (2014) dipped to Rs 102. 50 (6.97%) as against its previous close at Rs 102.53 (6.96%).

While, 7.49% government security (2017) closed at Rs 101.62 (7.27%) as compared to its previous close at Rs 101.63 (7.27%). At the opening of the trading session the prices moved up by 8-10 paise. But in the later half bond prices were pulled by the comment on the borrowing programme. Liquidity squeeze which is prevailing in the system is supposed to be eased within a week, said a dealer from private sector bank.

On the overnight call money market call rates eased up to 6-6.10% with liquidity mismatch in the market. This could be witnessed by RBIs LAF data. The RBI absorbed Rs 680 crore in its three day reverse repo auction, while it infused Rs 1250 crores in the system by means of three day repo auction at a rate of 6.25%.

With the importers showing buying interest in dollar, the domestic currency weakened further. The rupee on Friday ended at 45.77/78 per dollar as against 45.75/76 per dollar on Thursday. After weakening till 45.80/81 on an intraday front rupee stabalised. A positive sentiment was noticed when trading session started in morning because of the RBIs decision on Thursday to raise the interest rate cap on non-resident external rupee deposits to 75 basis points over LIBOR or dollar swap rates from 50 bps earlier. There was a good two way movement in the rupee. The forex players are concerned about the yens movement and are waiting for the news on chinese currency revaluation, said a forex dealer from private sector bank.

On the forward market front the annualised premiums inched up. The six month month annualised premia maturing in April closed at 0.53% as compared to 0.51% on Thursday. The twelve month annualised premium maturing in October ended at 0.46% as against 0.43% on Thursday.