Re ends stronger at 44.13/$

MARKETS REPORT

Forex Market

Outlook:
The spot rupee is expected to open in the range of 44.09-14 to a dollar.

Sentiment:Bearish

The spot rupee opened higher at 44.20/21 after closing at low of 44.23/24 on Tuesday.

During the day, following dollar supply by the RBI as part of intervention, the spot rupee closed at a high of 44.12/13 against dollar.

The annualised premium for six-month forward dollar closed at a high of 3.65 per cent against 2.99 per cent on Tuesday.

Money Market

Sentiment: Bearish

The market was bearish with concerns over liquidity since the first tranche of CRR hike comes into effect on February 17.

Prices of government securities fell by Re 1-Rs 2 across maturities.

The yield on the 10-year benchmark closed at 8.08 per cent.

Call rates inched up to 7.25/35 per cent and is expected to firm up on Thursday since banks will have to set aside funds for the CRR hike.

The Reserve Bank of India absorbed around Rs 110 crore from the market.

The cut-off yield on the 91-day t-bill firmed up to 8.10 per cent against 7.52 per cent last week, indicating anticipation of extreme tightness in the liquidity.