MUMBAI: The rupee weakened further by Wednesday afternoon on the back of a weak stock market, despite the dollar's losses against the euro. At 3
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pm, the rupee was at 47.94 against the dollar, weaker than Tuesday's close of 47.86.
On Monday, it hit 48 per dollar for the first time since May 28.
The euro edged up on Wednesday, tracking a recovery in oil prices, while the dollar slipped after Russia's call for more a diversified monetary system kept pressure on the greenback.
Government bonds are trading range-bound ahead of another Rs 15,000 crore bond auction on Friday. RBI is to buy back securities worth Rs 6,000 crore from traders tomorrow.
Dealers expect action to remain range-bound in the coming days till the budget, when they expect some clarity to emerge on the government's borrowing programme.
"Our estimate is that the 10-year would continue to trade range-bound in the 6.75% to 8% range," saya Aneesh Srivastava, chief investment officer at IDBI Fortis Life Insurance. "Let’s wait for the cues about the borrowing programme from the budget. If it’s not too harsh, then we could see some trading opportunities," he added.
The yield on the 6.07% paper maturing in 2014, was steady at 6.65% at 3 pm. The benchmark 6.05% paper of 10 year duration had no trades.
This is the for fifth time in succession that the size of the scheduled auction has been hiked to Rs 15,000 crore from Rs 12,000 crore. US Treasuries fell on Wednesday, after rising for four straight sessions, as President Obama said a recovery in the American economy may power a recovery in risk appetite.
