Rupee slips on weak equities

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The rupee breached the 53-to-a-dollar mark on Monday. However, it reversed the gains on weak equity markets and capital outflows to close weaker. The Indian currency closed at 53.28 against the previous close of 53.21. The Indian unit had opened stronger at 53 a dollar on stronger Asian markets and dollar’s weakness against other currencies. The rupee breached the 53-mark to touch an intra-day high of 52.91 on reports of likely inflows from foreign investors for subscribing to the share sale by the Government in NTPC. However, the gains were pared as dollar gained strength, leading to the rupee touching an intra-day low of 53.32.

With the euro retreating from its 14-month high against the dollar, the American currency gained further strength.

The rupee is likely to gain on stronger inflows expected from the upcoming share sales of, among others, NTPC, MMTC and SAIL in February and March.

However, analysts see no further room for rupee appreciation following looming concerns of current account and fiscal deficits.

Call up a tad; bonds ends lower

The inter-bank call money markets closed marginally higher at 7.85 per cent from the previous close of 7.80 per cent on Friday. Intra-day, the call rates moved in the 7 to 7.85 per cent range.

The 8.15 per cent government security, which matures in 2022, ended lower at Rs 101.37 (7.93 per cent) from Rs 101.54 (yield: 7.91 per cent).

(This article was published on February 4, 2013)
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