The Hindu Business Line : Rupee volatile; bonds rise

MUMBAI: The rupee ended mildly lower against the dollar on Monday on light corporate dollar demand after testing early highs in volatile two-way trade at the inter-bank foreign exchange market.

The domestic currency closed at 43.64/65 per dollar, a paisa decline from last Thursday's finish of 43.63/64. The rupee hit early peaks of 43.54/55, following a firm start at 43.59/60.

It tumbled to a low of 43.68/69 briefly in the afternoon, following an untoward incident at the Prime Minister's election meeting venue at Dhanbad, Ranchi.

After hitting early peaks of 43.54/55 on the back of heaped up dollar supplies accumulated over the long holiday weekend, dollar-demand from State-run banks pulled the rupee down to 43.6250/6350.

In cross currency trades, the rupee rallied against both the euro and the British sterling on the back of the dollar's sharp rebound against these units overseas.

The domestic currency ended sharply higher against the euro at Rs 52.68/70 from last Thursday's finish of 52.97/99, following a firm start at Rs 52.64/66 per euro.

It closed firmer against sterling at 80.03/05 per pound from 80.15/17 after a better opening slot of 79.91/93.

Bonds gained on speculation purchases of stocks by overseas investors have prompted the central bank to sell rupees, leaving banks, the biggest buyers of debt, with cash they may use to buy bonds.

The 8.07 per cent bond maturing in 2017 was up 20 paise to trade at Rs 125.30. The yield fell two basis points to 5.31 per cent, the lowest since October 18.