Re Gains Intra-Day, Unchanged At Close

The rupee appreciated to 38.66-70 against the greenback before closing lower at 39.00-10 yesterday, unchanged from its overnight levels, clearly indicating that the market was witnessing two-way trade. Call money rates, however, hovered in a wide band between 20 and 70 per cent.

Forex dealers said the rupee slipped, after gaining strength, in the wake of genuine corporate demand in the market. The local currency, which opened in the region of 39.00-10 soared to 38.66-70 on dollar sales. However, the heavy corporate demand wiped out the days gains towards close.

The inter-bank money market continued to remain tight yesterday and bid-ask quotes were very wide. The market ruled in a wide band of 20-60 per cent. Call rates declined during the course of the day but flared towards close.

 

Premiums opened at levels lower than Mondays but closed higher by 30 paise at the far end. In the near term, the premiums (in paise) for January was 40-45 paise and February 120-140 paise. Three-month premia was in the band of 20-23.5 per cent while six-month was in the region of 14.5-19 per cent.

In the money market, as has been the trend since Saturday, most of the lending activity was carried out by institutions and mutual funds. Fourteen-day repos transactions were conducted at 21-25 per cent. Many foreign and private sector banks are raising three-month funds through certificate of deposits at 13.5 to 15%.

The public sector banks continued to sell treasury bills to raise resources. Treasury bills maturing in February-April were dealt at 16-16.5 per cent. Among dated securities, the 12.14 per cent 2000 paper was dealt at Rs 98.90, the 12.50 2004 at Rs 98-98.75 and the 12.59 per cent 2004 rebounded to Rs 99.50.