The rupee closed at 55.85 against the dollar on a weak global sentiment.

The Indian unit opened weaker at 55.69 as the US Fed failed to take decisive steps to support the troubled US economy.

The dollar strengthened against other currencies after the US Federal Reserve hinted that there could be further easing action at the next meeting in September.

Investors were also disappointed after the Bank of England and the European Central Bank left its respective monetary policy unchanged.

The rupee will likely react tomorrow to the news from European Central Bank President’s announcement on measures to bring down borrowing costs in Italy and Spain down.

Intra-day, the rupee moved between a high and low of 55.65 and 55.96, respectively

The rupee has been dented by global sentiment as also by policy inaction by the Indian Government. On Wednesday, the domestic unit had closed at 55.47 against the greenback.

A depreciating rupee makes imports expensive and is considered to be a detriment for an import dependent country like India.

Call rates, G-Secs

The interbank call rates closed slightly lower at 8 per cent compared with yesterday’s close of 8.10 per cent.

The 8.15 per cent government bond, which matures in 2022, closed slightly higher at Rs 99.51 (yield: 8.22 per cent) from its previous close of Rs 99.45 (yield: 8.23 per cent).

satyanarayan.iyer@thehindu.co.in

(This article was published on August 2, 2012)
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