Re ends firm as banks sell $ to exporters

MONEY MARKET ROUND-UP

The rupee ended firm today as banks sold the greenback to exporters, noting sharp fall in the offshore, non-deliverable forward (NDF) rate, dealers said. After touching the day’s high of 45.21, the rupee ended at 45.44 per dollar as against 45.82 on Friday.

One-month dollar/rupee NDF rate that had risen over the 47-mark last week eased sharply today as banks unwound earlier positions, dealers said. Thus, a sharp fall in offshore rate prompted banks to buy dollars at a cheaper rate in NDF market and sell the same here for profits.

Some banks also sold dollars, noting its weakness against major rivals such as euro and pound sterling. The greenback took a beating on concerns over the bailout plan announced by US regulators.

On Friday, US Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke proposed to buy close to $700 bn of derivatives assets from banks and the Securities Exchange Commission banned short selling in equities.

Gilt: On the decline

Government bond prices continued their southward journey with resurgent global crude oil prices and persistent tight liquidity conditions back home prompting investors to liquidate positions, dealers said.

Currently, October crude oil futures on Nymex hover near $107 a barrel after closing at $104.55 on Friday and $97.88 on Thursday. The price of the 10-year benchmark 8.24 per cent, 2018 security had risen by over Rs 2 in early September, when global oil prices fell to $90 a barrel on demand worries.