The rupee closed weaker at 54.39 against the dollar as political uncertainty loomed large on the government after a key ally withdrew its support in opposition to “reforms”.

The rupee had gained after the government hiked diesel prices and announced steps to allow foreign direct investment in multi-brand retail, aviation and power exchanges. It also capped the number of subsidised LPG cylinders at six annually.

The local unit opened lower at 54.36 on a day when the Opposition called for a nationwide strike to roll back “reforms” that spurred the Indian currency.

The rupee had closed at 54 on Tuesday. The currency markets were closed on Wednesday on account of the Ganesh festival.

Besides, the month-end demand for the American currency by oil importers will also keep up the pressure on the rupee.

Call rates up; G-Secs steady

The interbank call rates closed slightly higher at 8.08 per cent from previous close of 8.05 per cent.

The 10-year benchmark 8.15 per cent government security maturing in 2022 closed almost steady at Rs 99.91 (yield: 8.16 per cent) against a previous close of Rs 99.87 (yield: 8.16 per cent)

satyanarayan.iyer@thehindu.co.in

(This article was published on September 20, 2012)
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