Re ends lower at 40.99/$

MARKETS REPORT

Forex market

Outlook:
The spot rupee is expected to open in the range of 40. 96-41.03 to a dollar

Sentiment: Bearish

The spot rupee opened at 40.95/96 but fell to a low of 41. 05 following demand from oil companies before closing for the day at 40.99 to a dollar.

The annualised premium for six-month and one-year forward dollars closed at 3.32 per cent and 3.04 per cent respectively.

Money market

Sentiment: Bearish

Sudden tightness in liquidity took the sheen off the market.

Prices of government securities fell by 15-40 paise across maturities.

The yield on the 10-year benchmark paper closed at 8.22 per cent against a closing of 8.20 per cent on Tuesday.

The RBI received only two bids worth RS 10 crore under reverse repo to absorb excess liquidity as against bids worth Rs 60,000 crore on Tuesday.

The cut-off yield on the 91 day t-bill figured at 7.39 per cent as against 7.14 per cent on Monday.

Notes:

The spread between the one-year and 10-year government security is around 47 basis points.

The spread between 10-year gilt and AAA corporate bond of similar maturity is around 170 basis points.

The overnight Mumbai interbank offered rate is at 6.69 per cent.