The yield on the benchmark 10-year bond ended at 7.36%, barely changed from its previous close. Among the actively traded securities, 8.07% government paper closed the trading session at Rs 105.24, as against its previous close at Rs 105.17/20.
The call rates eased to 7-7.20% on Wednesday. The Reserve Bank of India (RBI) pumped in a whopping Rs 9,200 crore through the repo auction in the morning at 6.50% and another Rs 4,500 crore in the afternoon, under the liquidity adjustment facility (LAF). It also absorbed a modest Rs 25 crore through the reverse repo auction in the morning and another Rs 2,115 crore in the afternoon. In the foreign exchange market, the domestic currency weakened on back of the dollars bullishness prevailing in the market following the Fed statements hinting at further firming up of interest rates. The rupee ended at 44.21/22 per dollar, 0.2% lower than its previous close of 44.12/13.
Aggressive buying of dollars by state-run banks on behalf of RBI to meet some requirements from the defence sector pushed the rupee further. Dollar gained strength against all the major currencies on back of expectations of further rate hikes, said a Forex dealer at a state-run bank. At the forward segment, the six month benchmark premia ending in July, closed the day at 2.37%, while the twelve month benchmark ending in January closed at 1.80% on Wednesday.