Re ends a tad weaker at 45.16/$

MARKETS REPORT

Forex market

Outlook:
Dealers expect the rupee to open at 45.10 per dollar.

Sentiment: Bullish

The rupee ended the day a tad weaker at 45.16 per dollar as against the previous close of 45.13/14 after having opened at 45.18. There was some buying in the market, which pulled down the rupee to close at these levels.

Forward premiums came off despite a cash crunch in the system.

The six-month forward premium ended at 1.33 per cent as against yesterday's close of 1.46 per cent. The 12-month forward premium closed at 1 per cent compared with 1.05 per cent.

Money market

Sentiment: Bullish

Bonds were almost flat in thin trades today.

The yield on the actively-traded 8.07 per cent 12-year bond was at 7.18 per cent. The nine-year government stock ended at 6.99 per cent.

Dealers opined that the yield differential of gilts across different tenors is narrowing. This implies there is a bullish undertone in the market.

Call rates closed at 7 per cent amid tight liquidity in the domestic banking system.

Dealers expect the Reserve Bank of India to continue the infusion of funds to tide over the liquidity crisis.

RBI did not receive any bids through the morning reverse repo auction. It infused a whopping sum of Rs 22,165 crore into the system at 6.25 per cent.

It mopped up Rs 3,220 crore at 5.25 per cent under second liquidity adjustment facility (SLAF) and injected Rs 5,745 crore into the system at 6.25 per cent.