The spot rupee ended higher at Rs 51.29 per USD as against its previous close of Rs 51.48.
Here is a verbatim transcript of Latha Venkatesh comments on CNBC-TV18. Also watch the accompanying video.
There were a few bits of positives for the bond markets. One is after this Friday auction, logically there may not be any more auctions till March 31. Of course one of the auctions – last week’s got cancelled because the bids were not to RBI’s liking. It is possible that can be scheduled again in which case there is a bit of a dampening of the happiness but otherwise the positive in the bond markets – why you see the bond markets higher is because the borrowing programme is ending.
The other positive of course which the market will not take to heart very much at the moment is that the inflation number that will be announced tomorrow for the first week of March will come in below 1%. That’s a historical low ever since records started being kept for inflation, the WPI growth has never been less than 1.2% sometime in 2002. This is a historic number but it is not going to create a huge amount of ripple in the bond markets because everybody knows that given the huge statistical base in 2008 – a lot of the numbers in 2009 are going to look small but the bond markets are not going to be taken in by that.
They are going to be worried about the borrowing programme and that’s the other point really the bond prices are not flying away – you’re just seeing them slightly firm because there is that Friday auction to tied over although RBI will be purchasing bonds on Thursday and thereby making some space for the Friday sale of bonds, nevertheless the market is still a trifle nervous. So firm but no runaway rally just yet.
There was less drama in the rupee market at this point in time. It was extremely steady, Asian markets did see their currency stronger, their equities stronger, Indian equities were strong – so the dollar did not have a very strong day but every time the dollar was dipping somewhat you did see a goodish bit of demand from importers. So a fairly ranged day for the rupee – you did see it rising but at all lower levels for the dollar there is a lot of support from importers. FDI flows is something people are talking about. They talk about DoCoMo, they talk about some kind of flows coming in but that’s also keeping the sentiment on the rupee a little better.
