Re declines on dollar buying by importers

The rupee weakened for a third day on speculation the country’s importers bought foreign currency to meet month-end payments.

The currency dropped as local refiners such as Indian Oil Corp may have stepped up dollar purchases to pay for crude oil imports after the price of the commodity gained 4 per cent this month. The rupee also fell after traders increased bets for its weakness in the overseas non- deliverable forwards (NDF) market.

“The rupee is a bit weaker today, mainly because of month-end dollar demand from importers,” said Sudarshan Bhatt, chief currency trader at state-owned Corporation Bank in Mumbai. “Some banks have sold the rupee after it fell in the NDF market,” he said.

The rupee lost 0.4 per cent to 48.935 a dollar at the 5 pm close in Mumbai, according to data compiled by Bloomberg. 

10-year bonds rally as RBI prepares to buy debt

Indian 10-year bonds gained the most in at least six weeks after the central bank said it would purchase existing government debt at an auction tomorrow.

The yield on the most-traded securities due 2019 fell the most since they were issued on July 13 as the Reserve Bank of India said yesterday it would offer to buy up to Rs 6,000 crore ($1.2 billion) of notes maturing in 2019, 2023 and 2032. The purchases may help limit the government’s borrowing costs as it plans to raise a record Rs 4.51 lakh crore in the financial year ending March 31.

The yield on the 6.9 per cent note due July 2019 declined by 18 basis points to 7.13 per cent at the 5:30 pm close in Mumbai, according to the central bank’s trading system. The price rose Rs 1.21 per Rs 100 face amount, to Rs 98.40.