Rupee up
The rupee opened at 44.07 on Tuesday and closed at 43.75, up by 35 paise against Friday's close at 44.11/12 as the strain in liquidity continued.

Companies are estimated to have paid as much as Rs40,000 crore ($9.1 billion) in advance tax on March 15, according to analysts estimates.

Call rates: The overnight price of money (call rates) shot up to 22 per cent on Tuesday as banks were borrowing heavily from each other to cover shortage of funds. Traders said some deals went as high as 50 per cent.

Banks also borrowed Rs35,250 crore through the RBI's repo window under the liquidity adjustment facility.

The threat of a nearly week-long closure of banks due to a strike call and the subsequent holidays has also prompted banks to cover up cash requirements.

Bankers also said the hike in CRR on December 9 and February 13 by a total of one percentage point to six per cent has drained Rs27,500 crore from the system. (CRR is the percentage of bank deposits locked up with the RBI.)

Market participants read the RBI's absence in the forex market on Tuesday as a signal that the central bank is determined to rein in inflation by not pumping rupees into the system.

Bonds: Bond prices fell by around 40 paise with the 8.07 per cent 10-year 2017 benchmark paper closing at Rs99.95 (8.07 per cent YTM) against Friday's close of Rs100.35 (8.01 per cent YTM).
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L&T can acquire only 4.7 pc in City Union Bank: RBI
Chennai: The Reserve Bank of India has approved an issue of only 12 lakh shares of City Union Bank to L&T, against the company's proposal to pick up 26.65 lakh shares in the bank.
City Union Bank and L&T had entered into an agreement according to which the latter would pick up 9.99 per cent stake in the bank at a price of Rs169. However, the bank today announced to the stock exchanges that approval from the RBI had been received for issuing 12 lakh shares, which translates to 4.7 per cent of the bank's equity. Consequently, the bank will receive Rs20.28 crore from L&T; it would have got Rs45 crore, if the regulator had approved L&T to take a 9.99 per cent stake in the bank.
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