Rupee ends higher, bonds lower

The Indian rupee ended higher as banks sold dollars noting the rise in local shares and dollar's weakness versus Asian units. The exporters also sold dollars. But, the dollar buys from the importers limited rise. 

The rupee ended higher at Rs 50.05 per USD as against its previous close of Rs 50.34.

The government bonds ended down as investors trimmed holdings ahead of 120 billion rupee auctions on Thursday. RBI's choice of gilts to be bought under OMO ( Open Market Operation) on Wednesday elicited mixed reactions. Spate of holidays in the week also kept mood cautious.

The widely traded 6.05%, 2019 paper closed lower at Rs 93.30 as against its previous close of Rs 93.57.

Here is a verbatim transcript of Latha Venkatesh's comments on CNBC-TV18. Also watch the accompanying video. 
On the Rupee:

The currency has had a very good day. The rupee opened almost 50 paise higher or rather dollar was cheaper by about 50 paise and that was largely because the rupee was also making up for the gain Asian currencies on Friday. All told, the G20 announcements had a salutary impact and the rupee's got two-days of catching up to do, so good going on the rupee. One saw a sharp fall in the dollar in the early morning trades but thereafter those statements coming from the RBI Governor that current account deficit could widen in the current year have had some kind of a positive impact on the dollar, in any case there has been buying by PSU banks but of course the NDF market - the offshore market - which had been long on the dollar was seen unwinding in the domestic market and that's why one is getting still a rupee that's stronger day-on-day. 

On the bond markets:

The bond markets have not shown any positive trend at all. They continue to be worried about the huge issuance on Thursday. About Rs 8,000 crore of the 10-year bonds will be issued and then there is another Rs 4,000 crore of a long bond issued. So market is not having much of an appetite for buying bonds.