The rupee ended almost unchanged at 60.82 against the dollar amid thin volumes of trades ahead of the RBI monetary policy next week.
The domestic unit opened a tad weaker at 60.85 as angst the previous close of 60.83 per dollar on Friday.
It further depreciated by 3 paise to 60.86 against the US currency in early trade at the Interbank Foreign Exchange market today due to increased demand for the American currency from importers amid a weak opening in the domestic equity market, which fell nearly 120 points.
However, the equity markets recovered with BSE-benchmark Sensex ending 116 points (0.43 per cent) to 27,207 at day’s close. Such capital flows and dollar selling by exporters supported the rupee to gain to 60.74 per dollar.
“The RBI will likely maintain its Rs 58-62 per dollar “range of tolerance” for USD/INR until it is able to build up sufficient FX reserves – close to 10 months’ import cover – which looks unlikely over our forecast horizon,” said Indranil Sen Gupta, chief economist, Bank of America Merrill Lynch in a report.
Call Rates and G-sec yields fall
The interbank call money rate, the rate at which banks borrow short-term funds from one another, pared gains to end weaker at 7.20 per cent from Friday’s close of 7.75 per cent.
The price on the 10-year benchmark 8.40 per cent government security, maturing in 2024, closed higher at Rs 99.74 from the previous close of Rs 99.62. The yield on the bond further softened to 8.43 per cent from 8.45 per cent.
Bond prices and yields move in the opposite directions.
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