Thin trade volumes and cautious investors led the rupee to close almost flat at 62.31 against the dollar. It had closed at 62.33 on Monday.

The Indian unit opened a tad softer at 62.40 from Monday’s close due to weaker domestic equity market and a relatively stronger dollar.

The BSE-benchmark Sensex ended down by 94.06 points (0.45 per cent) at 20,693.24 points at day’s close.

“There is less participation by investors and so, the movement has been dull. Also, exporters sold dollars at 62.50 levels, which was also the level that RBI was likely to intervene to limit the fall in the rupee,” said a dealer with a public sector bank.

The American currency was also trading strong against overseas currencies on continued sentiments of positive outlook given by the US central bank last week. Asian currencies were trading mixed compared to the dollar.

During the day, the rupee declined to 62.47 but recovered to 62.29 on mild dollar selling by exporters.

Market players will wait for the inflation numbers due to be released by the Government next week. Expectations of a lower inflation figure are likely to support the rupee.

Call rates and bonds

The interbank call money rate, the rate at which banks borrow short-term money from each other, ended flat from Monday’s close of 8.75 per cent.

The yield on benchmark government security 8.83 per cent, maturing in 2023, also remained almost flat at 8.79 per cent from the previous close of 8.78 per cent. Prices ended weaker at Rs 100.24 from Monday’s close of Rs 100.29.

Beena.parmar@thehindu.co.in

(This article was published on January 7, 2014)
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