Re ends at a new three-month high of 44.30/$

MARKETS REPORT

Forex market

Outlook:
The local currency is expected to open at 44.25-26 level against the dollar on Tuesday

Sentiment: Bullish

The rupee closed at a new three-month high of 44.29/30 against the dollar, helped by firm Asian currencies and the greenback's slide against the yen

Premiums on the six-month forwards closed at 1.86 per cent and those on the 12-month frowards rose to 1.37 per cent

Money market

Sentiment: Bearish

Yield on the 8.07 per cent 11-year bond inched up to 7.1869 per cent from Friday's 7.1831 per cent close.

The inter-bank overnight funds rate ended at 6.8/6.9 per cent, 70 basis points higher than Friday's close as banks borrowed huge amounts to meet reserve requirements at the onset of the new two-weekly reporting cycle

The Reserve Bank of India (RBI) auctioned a five-year federal bond for Rs 6,0000 crore and a 29-year stock for Rs 4,000 crore as part of the government's market borrowings

It set a cut-off price of Rs 112.18 at the auction of the 9.39 per cent 2011 bond, against market expectations of Rs 112.20. It also set a higher-than-expected cut-off price of Rs 99.60 at the auction of the 7.40 per cent 2035 bond

The RBI mopped up bids worth Rs 515 crore under its liquidity adjustment facility programme in the morning

The bank pumped in a total of Rs 13,425 crore through its repo windows in the morning and afternoon trades