Bonds rally; Re firms up to 43.77/$

Government bonds rallied on moderate inflation outlook by RBI in its currency and finance report released today.

The report said inflation was expected to be around 6.5% by March 2005.

The yield on the actively traded 7.38% 2015 bond dropped to 6.54% as against the last close of 6.61%.

The 7.37% 2014 bond was last traded at an yield of 6.66% as against the last close of 6.70%.

The spot rupee firmed up to 43.7750 per dollar as against the last close of 43.8450 per dollar on sustained inflows and dollar weakness in overseas markets.