The rupee weakened by 38 paise to close at 55.50 paring early morning gains on higher dollar demand from oil importers.
The domestic unit had opened higher at 55.03 from its previous close of 55.12 against the dollar on robust FII inflows and US Federal Reserve’s stimulus measure hopes on Tuesday.
“The higher oil import bills are strengthening the dollar demand amid reform hopes making the rupee volatile. This is likely to remain in the current week,” said Mr K. Eswar, General Manager, Treasury, Central Bank of India.
“Rupee will see a correction and stabilise at 49-50 levels in three months,” Mr Eswar added.
Call Rates flat; bonds rise
The interbank call money rates ended flat at 8.10 per cent from yesterday’s close. Intra-day, the call money market rates had declined to 7.90 per cent after a steady opening.
The most traded 8.15 per cent bond maturing in 2022 was ended higher at Rs 100.55 (yield: 8.06 per cent) from its previous close of Rs 100.38 (yield: 8.09 per cent).
The 9.15 per cent government bond maturing in 2024 was trading higher at Rs 106.49 (yield: 8.29 per cent) from a close of Rs 106.43 (yield: 8.30 per cent) on Tuesday.