The rupee weakened by 18 paise to 61.70 to a dollar against the previous close of 61.52 on sustained dollar demand from importers and banks amid volatility in the domestic equity market.

The rupee fell for a consecutive second session on the back of recovery of the dollar index.

According to a treasury dealer with a public sector bank, dollar buying by a private sector oil company weighed on the domestic unit.

Abhishek Goenka, Founder and Chief Executive Officer of India Forex Advisors, said with the expectation of an interest rate hike in the forthcoming RBI monetary policy on October 29 and US jobless data due for the day, investors would be wary and on their guard before entering into major trades. This may prompt the market to trade once again in a narrow range.

The inter-bank call money rate, the rate at which banks borrow from each other to meet their short-term fund requirements, opened higher at 9.05 per cent against the previous close of 9 per cent.

The 7.16 per cent government security, which matures in 2023, opened higher at Rs 90.74 per dollar from the previous close of Rs 90.70. The yields softened a tad to 8.59 per cent from the previous close of 8.60 per cent.

deepa.nair@thehindu.co.in

(This article was published on October 22, 2013)
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