Rupee gains; bond prices fall
Mumbai: The rupee gained against the US dollar, closing at 45.34, about eight paise up from Thursday's close of 45.42.

Forwards: The 12-month premium closed at 0.82/93 per cent (0.7 per cent) and the six-month premium closed 1.1 per cent (0.85 per cent).

G-Secs: The 8.07- 12-year-2017 paper closed at Rs106.40 (7.21 per cent YTM), down from yesterday's level of Rs106.51 (7.20 per cent). The 10.25-16-year-2021 paper closed at Rs126.12 (7.38 per cent), down from Thursday's close of Rs126.32 (7.37 per cent YTM).

Call rates: Call rates were around 6.25 per cent and closed at 6.40 per cent (6-6.05 per cent).

Reverse Repo: In the first three one-day reverse repo auction, the RBI received and accepted five bids amounting to Rs3,390 crore and one bid for Rs20 crore in the second auction. In the three-day repo auction, RBI received and accepted three bids for Rs1,085 crore.

CBLO: There were 329 trades for Rs14,747.45 crore in the range of 5.8-6.35 per cent.
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Redemption likely to cause pressure on liquidity: Reddy
Mumbai: Y V Reddy, governor, Reserve Bank of India said that redemption of the US$7.3bn IMD, coming up on December 29, may cause 'frictional' pressure on liquidity.

As there is an increased demand for liquidity in the system, he said the central bank was watching the developments carefully.

As per the arrangement made by RBI, it would sell forex reserves to SBI at the prevailing market rate to meet redemption of IMDs.

The rupee consideration, which is likely to be around Rs33,000 crore, will be paid by SBI, which has already taken adequate steps to purchase foreign exchange from the RBI.

The exchange loss, if any, on account of depreciation of rupee would be shared between SBI and the Union Government, said the RBI.
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IDBI rules out taking over IFCI, IIBI
New Delhi: The Industrial Development Bank of India (IDBI) has ruled out acquisition of ailing financial institutions IFCI and IIBI. It also said it was aiming at 16 per cent growth in business at over Rs71,000 crore and plans to open over 300 branches in the next two years.

IDBI Bank is also looking at entering into life insurance for which it has appointed an advisor, Watson Wyatt, according to IDBI chairman, V P Shetty. The bank expects its assets to grow to over Rs90,000 crore, from Rs81,500 crore, till September on the back of a retail thrust.

Shetty said IDBI Bank expects loan advances to cross Rs50,000-51,000 crore in this fiscal from about Rs46,000 crore in 2004-05. The IDBI chief said the bank was trying to reduce its cost of funds by stressing on low cost deposits and reduce the reliance on bonds.

After the merger of IDBI with its private banking arm IDBI Bank, the country's leading financial institution is now spreading its wings across the country.

IDBI had plans to increase its branch network to 200 by March next year, from the present 155 branches.
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