The rupee today pared early gains to close at 55.61 against the dollar due to month-end demand for dollars from banks and oil importers.

The domestic unit that had opened higher at 55.29 from Friday’s close of 55.34 on a stronger euro and Asian markets. The euro was buoyed by comments from the European Central Bank President on Friday to do whatever necessary to save the Euro zone.

Further, the rupee was helped by robust domestic equity markets with benchmark Sensex closing higher by 1.81 per cent at 17,143.68. Intra-day, the rupee had strengthened to 55.20 before falling to a low of 55.61 against the dollar.

The rupee is likely to react with the Reserve Bank of India’s monetary policy review decision tomorrow. Largely, market expectations show the central bank is likely to maintain a status quo due to rising inflation. However, according to senior bankers and market participants a rate cut will lift the market mood.

Call rates and G-Secs

The overnight call money rate closed slightly higher at 8.05 per cent from its previous close of 8 per cent on Friday. Intra-day it had moved in the range of 8 per cent and 8.15 per cent.

The 8.15 per cent government maturing in 2022 ended lower at Rs 100.00 from Friday’s close of Rs 100.19, while its yield edged higher at 8.14 per cent from 8.12 per cent.

(This article was published on July 30, 2012)
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