Heavy dollar selling led the rupee to close higher at 55.52 against the dollar on Thursday, up by 65 paise from its previous close of 56.17 on Wednesday.
The Indian unit had opened stronger at 56.05 on steady euro and Asian markets.
The rupee is likely to appreciate to levels of 54 or below against the US dollar by December, according to a survey with 130 participants conducted by Royal Bank of Scotland (RBS).
About 58 per cent of the market participants believe that the USD/INR market is trading ‘neutral’, the survey said.
Call rates and G-Secs
The call money market ended higher at 8 per cent. With higher liquidity in the system, the call rates had closed at 7.95 per cent, lower than the RBI’s policy rate at 8 per cent.
The 9.15 per cent government bond maturing in 2024 closed a tad higher at Rs 106.46 (yield: 8.29 per cent) from its previous close of Rs 106.43 (yield: 8.30 per cent) on Wednesday.
The 8.15 per cent bond maturing in 2022 closed lower at Rs 100.23 (yield: 8.11 per cent) from a close of 100.31 (yield: 8.10 per cent) yesterday.
According to the RBS survey, the market expects the 10-year G-Sec to trade between 6.50 per cent and 8.50 per cent by December with an average at 7.94 per cent and median at 7.90 per cent.