Opening the day at 45.3525/3600, the rupee gained by close as the usual month-end demand for dollars was non-existent. The rupee had last ended at better levels of 45.2850/2950 on November 10, 2003.
Moodys Investors Service upgrade of the country to investment grade is seen widening the investor base for Indian assets and bring down borrowing costs on foreign currency loans. More dollar inflows are seen in the days ahead, a dealer said.
The forward market eased as the spot-rupee gained to close at 45.30/31 against the dollar. The six-month annualised forward cover ended at 1.05 per cent after early quotes at 1.03 per cent while the one-year cover ended at 0.82 per cent from 0.85 per cent.
Buoyed by sustained steady foreign fund inflows and export proceeds, the spot-rupee has gained by over 40 paise since January 2. Exports grew by 42.68 per cent December 2003 to touch $5,489 billion. The overall export growth for the April to December period registered a 13.48 per cent growth at $ 42,433 billion while the annual target was 11.9 per cent.
In the government security market, prices at the short- to medium-end fell by 30-50 paise while in the longer maturities, the fall was steeper. Dealers said fiscal slippage worries and concerns over rising inflation weighed heavily on the market.
The yield on the benchmark 10-year paper spurted to 5.1 per cent from its overnight 5.14 per cent, before settling at 5.18 per cent at close. The 7.27 per cent 2013 dipped to Rs 115.55 from its overnight Rs 115.95, before ending at Rs 115.63 / 66.