The rupee snapped its four-day rally to close weaker at 62.58 against the dollar due to dollar demand from banks and importers. The domestic unit opened a tad strong at 62.30 against the previous close of 62.36 on initial selling of dollars by banks and exporters amid foreign capital flows. It further appreciated 62.25 in the afternoon trades. Forex dealers said the dollar’s weakness against other overseas currencies, after the US Federal Reserve Chief Ben Bernanke indicated that the bank’s stimulus programme would remain in place until the economy is back on track, supported the rupee. However, the rupee failed to sustain the early gains and declined to 62.67 a dollar in the late afternoon trades. Meanwhile, the domestic equity market ended weaker by 255.69 points (1.22 per cent) at 20,635 points. This also weighed on the rupee.

Call rates, G-secs

The overnight call money rate, the rate at which banks borrow short-term funds from each other, ended a tad lower at 8.73 per cent against Tuesday’s close of 8.80 per cent. The yield on the widely traded 8.28 per cent security, maturing in 2027, hardened to 9.02 from the previous close of 8.99 per cent. In price terms, the bond closed weaker at Rs 94.15 from Rs 94.39. Yield on the 10-year benchmark government security, 7.16 per cent maturing in 2023, hardened a tad to 9.02 per cent from 9 per cent. Finance Minister P. Chidambaram on Tuesday had said the rise in the interest rate in G-Secs was temporary and that some measures by the RBI should moderate the yields. — Our Bureau

(This article was published on November 20, 2013)
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