Oil firms' $ mop-up pushes Re to 44.42

The rupee ended at a new 20-month low against the US dollar on Tuesday because banks bought the greenback to meet strong demand from oil companies, and the offshore non-deliverable forward market, dealers said. The rupee was also weighed by the dollar’s gains versus major currencies and most Asian units.

The rupee ended at 44.4200 per dollar, levels last seen in January 2007. On Monday, the Indian unit had ended at 44.1600 per dollar. Three large state-run oil companies were said to be heavy dollar buyers on Tuesday, dealers said.

Some banks also bought dollars to cash in on the arbitrage opportunity between the onshore forward and the offshore NDF market, dealers said. The rate difference prompted foreign banks to buy dollars at a cheaper rate in the local market and sell it overseas for profits.

G-Sec: Bullish mood
The government securities (G-Sec) market traded largely on a bullish note, tracking the intra-day easing of crude oil prices. Crude oil prices were seen trading at $110 a barrel, down $5 from Friday’s levels.

However, the market fell towards the close of the day’s trading due to profit-booking. The yields ended lower, with a sharper movement at the longer tenors. The benchmark 10-year paper 8.24 per cent 2018 closed at Rs 97.61, implying a yield of 8.61 per cent.

The turnover in g-sec was around Rs 9,775 crore. The top-traded securities remained 8.24 per cent GOI 2018 and 8.24 per cent GOI 2027 with turnover of Rs 4,535 crore and Rs 4,180 crore, respectively.

Call rates: Firm closing
Call money rate ended around 9 per cent on Tuesday, after touching a high of 9.50 per cent, as demand waned towards close of trade, dealers said.