“RBI must have come up with the OMO keeping in mind the pressure on liquidity conditions ahead of advance tax payments on June 15,” said a bond dealer with a public sector bank. According to the issuance calendar, bond sale auctions are not scheduled next week.
The government today raised Rs 7,000 crore under the new 10-year benchmark bond at a coupon rate of 8.15 per cent. Issuances in the previous benchmark carrying a coupon rate of 8.79 per cent had reached Rs 83,000 crore and the market was already using the bond maturing in 2024 as the next best alternative.
RBI also auctioned Rs 3,000-crore worth of bonds maturing in 2018, another Rs 3,000-crore worth of bonds maturing in 2030 and Rs 2,000-crore worth of bonds maturing in 2036.
Meanwhile, the rupee snapped a three-day winning streak against the dollar due to consistent buying of the greenback by oil companies and foreign investors. The currency closed at 55.46 per dollar, one per cent lower than the previous day’s close. However, as compared to last Friday, the rupee appreciated 0.2 per cent, in its first weekly gain of the current financial year.
“Yesterday’s Fed (US Federal Reserve) comments helped the dollar gain against its peers and, consequently, contributed to the rupee depreciation for the day," said India Forex Advisors in a note. The safe-haven currency strengthened after Fed chairman Ben Bernanke, in a speech yesterday, gave no hint of a fresh stimulus. The dollar index, which measures its performance against a basket of six major currencies, was at 82.78 today from 82.05 a day before.
Fading hopes of a third round of quantitative easing led to investors shedding risky assets today. Foreign institutional investors sold Rs 1,577-crore worth of shares and concluded with a net investment of just about Rs 200 crore in the Indian equity markets today, according to data from the Bombay Stock Exchange.
Dealers said dollar supply from foreign banks helped the rupee touch an intra-day high of 55.14 against the dollar.
Source: Business Standard