Rupee gains
Mumbai: The rupee gained by around 31 paise against the greenback and closed at a nine-year high of 41.76/77 on Friday against the previous close of 42.07.

The rupee opened at 42.05 and weakened to an intra-day low of 42.15 on banks' buying dollars on behalf of oil companies, before closing at 41.76. Inflation is at 6.09 per cent against the previous week's 5.79 per cent.

Dealers are expecting the Reserve Bank of India to raise rates, which will result in a cash crunch for banks, prompting them to buy dollars.

In the forwards, the six-month premia closed at 6.54 per cent (6.10 per cent) and the 12-month closed at 4.88 per cent (4.68 per cent).

Bonds: Bond prices rose slightly on ample liquidity in the system. Total traded volumes on the order-matching system were Rs2,310 crore (Rs3,745 crore).

G-secs: The 8.07 per cent - 10 year-2017 paper opened at Rs99.98 (8.07 per cent YTM) and closed at Rs100.02 (8.06 per cent YTM), against Thursday's close at Rs99.95 (8.07 per cent YTM).

The 7.38 per cent-8 year 2015 paper opened at Rs95.48 (8.13 per cent YTM) and closed at Rs95.47 (8.13 per cent YTM), against the previous close at Rs95.42 (8.14 per cent YTM).

Call rates: Call rates remained unchanged at 9.50-10 per cent on Friday.

Reverse repo: In the first three-day repo auction, the RBI received and accepted twenty bids for Rs10,010 crore while there were no reverse repo bids. In the second three-day reverse repo auction, the RBI received and accepted two bids for Rs115 crore. In the second three-day repo auction, the RBI received and accepted seventeen bids for Rs6,190 crore.

The CBLO market saw 343 trades aggregating to Rs17,138.20 crore in the 7.41 per cent-9.50 per cent range.
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SBI to raise $2.4 billion through debt in FY08
Mumbai: State Bank of India plans to raise up to Rs100 billion ($2.4 billion) in debt during the current financial year ending in March, 2008, the bank said on Friday.

SBI told the Bombay Stock Exchange that it would issue bonds with a minimum maturity of more than 60 months.
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RBI likely to put fee on cheque payments
Mumbai: The Reserve Bank is planning to impose a fee on paper cheque payments to encourage customers to switch to electronic mode for transferring funds. The fee on payments made through paper-based cheques should be borne by the customers, a study group of the central bank suggested in a report on "Migration of paper-based funds movement to electronic funds transfers".

The report also suggested that customers should not be allowed to pay credit card dues and mobile bills through cheques but instead should be asked to compulsorily pay bills for online transactions through electronic mode. RBI posted the report on its website today for public comments, which would accept till May 15.

The report suggested that electronic fund transfers should be made free for three years and legal protection be made available to such transfers.

The report also recommended that government should be encouraged to migrate to electronic-based receipts and payments within three years and the progress should be reviewed every six months by the RBI.
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Forex reserves rise $2.7 billion
Mumbai: Forex reserves surged by over $2.7 billion for the week ended April 13 on the back of FII inflows and strengthening of non-dollar currencies against the greenback. The country's forex reserves grew by $2.772 billion to $203.092 billion.

India's forex kitty touched $200.320 billion for the week ended April 6. Foreign currency assets during the week ended April 13 increased by $2.769 billion to $195.844 billion, according to the RBI's Weekly Statistical Supplement.

Foreign currency assets, as expressed in dollars, include the effect of appreciation or depreciation in non-US currencies (euro, sterling and yen) held in reserves.
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Banks permitted to sell derivative products
Mumbai: The Reserve Bank of India has allowed commercial banks (excluding regional rural banks) and primary dealers to sell derivative products.

According to the revised guidelines on derivatives by the RBI banks and primary dealers can trade in rupee interest rate derivatives, which includes Interest Rate Swap (IRS), Forward Rate Agreement (FRAs) and Interest Rate Futures, Foreign Currency derivatives and Foreign Currency Forward, which includes Currency Swap and Currency Option.

The RBI defines derivative as an instrument, settled at a future date, whose value is derived from a change in interest rate, foreign exchange rate, credit rating or credit index, price of securities (also called "underlying"), or a combination of more than one of them.
Banks may undertake interest rate futures transactions to hedge the interest rate risk on their investments in government securities in AFS and HFT portfolios.

All permitted derivative transactions, including roll over, restructuring and novation shall be contracted only at prevailing market rates. The notification further explains, that all risks arising from derivatives exposures should be analysed and documented, both at transaction and portfolio level.
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