Rupee declines 0.8%

The rupee dropped the most in almost a week after US policy makers signaled they will refrain from a further boost to monetary stimulus that may have spurred fund flows into emerging markets. Minutes of the Federal Reserve’s March policy meeting released yesterday indicated it will avoid increasing asset purchases unless the recovery in the world’s largest economy falters. Foreign investors added $9.1 billion to holdings of Indian shares this year as dollar funds released by the Fed filtered through to faster-growing economies.

The rupee declined 0.8 per cent to 51.1 per dollar in Mumbai, the biggest decline since March 29, according to data compiled by Bloomberg. India’s currency and bond markets will be shut tomorrow and on April 6 for holidays. Three-month offshore non-deliverable forward contracts for the rupee traded at 52.09 per dollar, compared with 51.67 yesterday.

Bonds recover, call rate falls further
Government securities (G-Sec) recovered marginally on fresh buying by banks. The 9.15 per cent G-Sec maturing in 2024 recovered to Rs 102.98 from Rs 102.47, while its yield dropped to 8.75 per cent from 8.82 per cent yesterday.

After moving in a range of 9.5 per cent and 7.5 per cent the overnight call money rate ended further weak at 7.5 per cent.

The 8.79 per cent (G-Sec) maturing in 2021 also recouped to Rs 100.6350 from Rs 100.33 previously, while its yield declined to 8.69 per cent from 8.74 per cent. The 8.19 per cent (G-Sec) maturing in 2020 rose to Rs 97.08 from Rs 96.81, while its yield dipped to 8.71 per cent from 8.76 per cent. The 8.97 per cent (G-Sec) maturing in 2030 improved to Rs 99.90 from Rs 99.70, while its yield eased to 8.98 per cent from 9.00 per cent. The 8.83 per cent (G-Sec) maturing in 2041 gained at Rs 97.75 from Rs 97.65, while its yield softened to 9.05 per cent from 9.06 per cent. The 7.83 per cent (G-Sec) maturing in 2018 went up to Rs 96.05 from Rs 95.85, while its yield slipped to 8.69 per cent from 8.73 per cent.

2-day call money rate ended at 9.60 per cent and 5-day call money rate moved in a range of 9.50 per cent and 8.50 per cent before concluding at 8.75 per cent. The Reserve Bank of India RBI) under the Liquidity Adjustment Facility (LAF) purchased securities worth Rs 48,295 crore from 36 bids at the five-day repo auction at a fixed rate of 8.50 per cent while in the second LAF the RBI purchased securities worth Rs 35,500 crore from 33 bids at the five-day repo auction at a fixed rate of 8.50 per cent and sold securities worth Rs 5,150 crore from 15 bids at the five-day reverse repo auction at a fixed rate of 7.50 per cent. PTI VMP YB 04041832