Re spurts to 11-week high of 44.47/$

MARKETS REPORT

Forex market

Outlook:
The rupee could opened at 44.75 levels on Thursday as yen continued to rise against the dollar.

Sentiment: Bullish

In a volatile trade, the rupee hit a 11-week high of 44.47 per dollar against its previous close of 45.04 on account of global dollar weakness.

The rupee opened with a 20 paise gap at 44.82 per dollar in early trades following yen's rally versus the dollar

Forward premiums edged up a tad tracking the strong spot rupee. The six-month forward ended at 1.11 per cent against yesterday's close of 1.07 per cent. The 12-month forward premium closed at 0.87 per cent compared with its previous close of 0.85 per cent.

Money market

Sentiment: Bullish

Gilts came under selling pressure ahead of the auction announcement of government borrowing programme.

The yield on the actively traded 8.07 per cent 2017 gilt was at 7.18 per cent.

The Centre is expected to borrow Rs 10,000 crore by selling gilts of 5 to 10 year maturities.

Call rates softened to 5.50 per cent levels amid adequate liquidity in the domestic banking system. Even banks have covered their positions ahead of reporting Friday.

Liquidity got a boost on increased government spending and interest payments of about Rs 10,000 crore on a Special Deposit Scheme.

RBI mopped up Rs 750 crore through its morning reverse repo auction. It mopped up Rs 2,415 crore at 5.25 per cent under second liquidity adjustment facility.