Dollar sales push Re up

MONEY MARKET ROUND-UP

Rupee rose to over a one-week high against the dollar today because banks sold the greenback to exporters as well as on noting the fall in non-deliverable forward rates, dealers said.

The Indian unit ended at Rs 49.44 a dollar, compared with Rs 49.95 on Tuesday.

Among banks, a large US bank was among major sellers of the dollar today, dealers said.

One-month NDF dollar/rupee rate fell to Rs 49.8900, compared with Rs 50.45 on Tuesday. A further rise in Asian currencies intraday also led banks to sell dollars here.

Gilt: Prices rise

Government bond prices ended up because investors persistently bought on wide expectations that Reserve Bank of India may slash key interest rates after People’s Bank of China cut rates today, dealers said.

People’s Bank of China slashed its lending rates 108 basis points—the deepest cut in the last 11 years—to boost economic growth.

The most traded 8.24%, 2018 gilt settled at Rs 107.75 or 7.0948 per cent yield to maturity, compared with Rs 106.87 or 7.2195 per cent on Tuesday.

Expectations of fall in weekly inflation also prompted bond traders to build positions.

The headline inflation has been consistently easing since August and it has raised hope among bond traders that RBI may cut reverse repo and repo rates 50bps each.