The rupee closed stronger at 54 against the dollar as ‘reforms’ initiated by the government on Friday outweighed the Reserve Bank of India’s decision to keep the policy rates unchanged.

It touched the day’s low of 54.20, shortly after the central bank announced its decision.

The rupee persisted on the galloping course it set off on Friday and gained 50 paise in the opening trade.

The domestic unit opened stronger at 53.80 (Friday’s close 54.30) as the news about allowing FDI in multi-brand retail, aviation and non news broadcast services, which was announced late on Friday, weighed positively on the market sentiment.

The Government's decision about partial disinvestment of some public sector undertakings also added to the sentiment favourably.

Allowing FDI means foreign companies keen to invest in India will bring in more dollars thereby strengthening the rupee against the American currency.

G-Secs, Call rates stable

The 10 year benchmark 8.15 per cent government security, which matures in 2022, closed at Rs 99.78 (yield: 8.18 per cent) from Friday’s close of Rs 99.80 (yield: 8.18 per cent)

The interbank call rates ended flat at 8 per cent.

satyanarayan.iyer@thehindu.co.in

(This article was published on September 17, 2012)
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