Re ends at 44.66/$

MARKETS REPORT

Forex market

Outlook:
The rupee is likely to open at 44.65/66 levels on Monday, subject to dollar moves overseas.

Sentiment: Bearish

The rupee today closed at 44.6550/6650 a dollar against Thursday's close of 44.5450/55. The level was the lowest touched since January 6 when the rupee was at 44.7550. It touched an intra-day high of 44.69.

Traders attributed the dip to the surge in corporate demand for dollars to meet import payments and possible intervention of RBI to keep exports competitive.

Traders also said that state-run banks sold rupees possibly on behalf of the RBI to absorb foreign investment flows into the stock market.

Traders said state-run banks bought dollars till 44.67 and then moved away, allowing the rupee to bounce off lows.

Forwards ended a tad lower, with the six-month and annualised premiums closing at 1.92 per cent (2.12 per cent) and 1.68 per cent (1.79 per cent).

Money market

Sentiment: Bearish

The gilts market witnessed a one-month high on expectations that tight liquidity conditions would ease after the FM expressed hopes that RBI would announce a cut in the cash reserve ratio.

The yield on the active 8.07 per cent 2017 gilt eased to 7.36 percent, from 7.3774 per cent on Thursday.

The price of the benchmark paper touched an intra-day high of Rs 104.99 before closing the day at Rs 105.05 levels.

The overnight swap rates also eased, with the five-year swap rate indexed to call rates dropping to 6.74 per cent from 6.80 per cent on Thursday.

However, the auction announcement for a Rs 18,000 crore auction in April is likely to trigger a negative impact, felt traders.

The gilt market opened around 30 paise higher on Friday, but witnessed some selling from players ahead of the auction announcement.

The RBI pumped in Rs 13,250 crore through liquidity adjustment facility sessions, while it mopped up bids worth Rs 1,455 crore.