Rupee closes flat at 62.69 against dollar

The rupee closed almost flat at 62.69 against the dollar amid mild demand for the American currency from importers and banks and caution ahead of US Fed announcement on interest rate hike.

Dealers avoided taking fresh dollar positions ahead of the interest rate announcement and the dollar stood steady against major Asian currencies.

The domestic currency opened at 62.67 as against Tuesday’s close of 62.70 against the dollar. Mild dollar demand and capital outflows from the domestic equity market dragged the currency to 62.78.

However, it recovered to 62.61 as dollar steadied and dealers treaded cautiously in the trading session prior to the US Federal Reserve’s announcement.

The US central bank was expected to take a major step toward hiking interest rates for the first time in almost nine years, thereby normalising the traditional monetary policy.

A Fed statement is due at 1800 GMT. The central bank will also release the members’ forecasts for inflation and interest rates, and some analysts suspect the trajectory of future increases could be lowered.

Intra-day, the rupee traded in the range of 62.61 and 62.78 at the Interbank Foreign Exchange Market.

The yield on 10-year benchmark 8.40 per cent Government security maturing in 2024, ended at 7.79 per cent from the previous close of 7.78 per cent. During the day it hardened to 7.80 per cent. The price of the security ended at Rs 103.97. The prices and yields move in opposite direction.

The interbank call money rate, rate at which banks lend to each other, ended at 6.65 per cent, after moving between 6.50 and 7.75 per cent range.

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