Rupee rallies; bonds reel

The rupee today rallied smartly against the dollar on the back of strong bunched up week-end dollar supplies amid a retreating dollar overseas even as trade was quiet at the interbank foreign exchange (forex) market on account of the incessant heavy rains.

Rupee opened on a firm note at Rs 43.46 per dollar. Closing at Rs 43.42 per dollar, sharply higher from last Friday's close of Rs 43.48, the rupee traded in a range of Rs 43.4150 and Rs 43.46 in low key business, adversely affected by thin attendance at banks due to the heavy rains that disrupted road, rail and air traffic.

Heaped up weekend dollar supplies amid a weak dollar overseas, fuelled a sharp rupee rally today even as the forex spot trade was subdued in shallow volumes owing to the heavy rains that lashed the city, disrupting road and rail traffic, dealers said.

However, the outlook for the rupee remains uncertain due to flaring global oil prices, despite rising foreign fund inflows into the buoyant stock markets, they added.

Inclement weather and rains kept most of the players away from the market. The prices of the government securities trade in a thin range of 20 paise.

The 10-year, 7.38% 2,015 bond closed at an yield of 7.02%. Call rates closed at 4.5%.