Rupee strengthens, bond yields flat

* Rs. 2bn T-bond offer upsized to Rs. 4.3bn


The rupee appreciated against the US dollar on Tuesday (12) while secondary market Treasury bond yields closed flat after some volatility after a five-year-five-month bond was upsized to twice the original offer.

Currency dealers said the rupee appreciated to Rs. 126.10 against the greenback on foreign currency inflows from an opening position of Rs. 126.30. They said the inflows were largely into the bond auction yesterday.

The Public Debt Department of the Central Bank offered Treasury bonds worth Rs. 2 billion. Bids amounted to Rs. 10.25 billion of which Rs. 4.3 billion were accepted at an weighted average yield of 10.73 percent.

"Foreign demand for the bonds and the use of captive sources to subscribe for the issue kept the yield low," one analyst said.

The five year Treasury bond in the secondary market saw its yield move up to 10.90 percent from an opening position of 10.85 percent. The yield eased back to 10.85 at the close.

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