Rupee moves up touching mark of 46 a dollar
On Friday, rupee went past the mark of 46 per dollar maintained by increase in domestic stock market. The rise came even when many banks were forced to borrow from central bank worth Rs 83,510 crore via repo operations, due to tight cash situations.
For past few weeks, many banks have been borrowing huge cash over Rs 50,000 crore following tensed cash conditions. Reaction for rupee got boosted with calming down of short term forward contracts and dollar selling by investors. The day marked its end with 45.80/82 per dollar intensifying from a previous day’s close of 46.42/43.
A senior dealer at a private bank said that the strong selling of dollar was observed and it wasn’t forced by central bank.
The rise in indices throughout the Asia guided the recovery of rupee, with BSE sensex commencing the day ended with 726 points. On account of possible loosening of forward contracts and inflows of foreign investments, many foreign banks were found selling greenbacks.
On Tuesday, the Indian currency had touched a two year low against dollar at 46.99mark, as foreign banks were found buying greenback in spot markets and selling in overseas Non-Deliverable Forwards or NDF.
With firm cash situations and concern regarding inflation moving sentiments of investor, at the end of the day bond yields went down with its previous day’s close. The 8.24% bond maturing ion 2018 was found commencing unaltered from its previous day’s close, at 8.39%. According to a dealer, yields after touching 8.43%,
Meanwhile, bond yields ended the day flat with their previous close since tight cash conditions and inflationary concerns took a toll on the investor sentiment. Yields on the 10-year benchmark bond, the 8.24% bond maturing ion 2018, ended the day at 8.39%, unchanged from its previous close.