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Paring initial losses, the rupee ended higher at 54.70 against the dollar due to a firm euro and dollar selling by foreign banks.
The Indian unit had opened softer at 55 on weaker domestic and Asian equity markets. On Monday, it had closed at a two-month low of 54.89 to the dollar on lower industrial output and rising inflation. The forex markets had remained closed on Tuesday and Wednesday on account of Diwali festival.
“Tracking the BSE-benchmark Sensex which ended weaker by 148 points, the rupee fell in the first session as investors remain cautious on global cues. Further, there were not many buyers in the morning trade,” a chief dealer of a nationalised bank said. Political uncertainty over the fiscal cliff in the US is putting pressure on the global markets.
“Amid no big news and reform announcement not translating, the rupee is likely to stay volatile.” the dealer said.
Call rates and G-Secs
The interbank call rates ended marginally higher at 8.12 per cent amid mild trade on Thursday. The call money market had opened slightly lower at 8.10 per cent from Monday’s close of 8.14 per cent.
The benchmark 8.15 per cent government security, which matures in 2022, closed higher at Rs 99.73 (yield: 8.19 per cent) from its previous close of Rs 99.58 (8.21 per cent) on Thursday.
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