Paring initial losses, the rupee ended stronger at 62.16 against the dollar on Friday due to likely intervention by the central bank asking banks to sell dollars.

The Indian unit opened further weaker at 62.38 due to a stronger American currency and a weaker domestic equity market. It had closed at a one-month low at 62.26 on Thursday.

The rupee further declined to 62.55 per dollar during the day as the dollar held steady at a two-week high against overseas currencies after positive US economic data that reinforced expectations that the US central bank will continue the already announced tapering of the quantitative fiscal stimulus.

However, after the likely intervention by the Reserve Bank of India to sell dollars at 62.50 levels to further limit the fall, the rupee recovered to trade at 62.14 in the late afternoon trading session.

Intra-day, the rupee moved 41 paise at the Interbank Foreign Exchange market.

Meanwhile, equity market was weaker with BSE-benchmark Sensex ended lower by 37 points (0.18 per cent) at 20,851.33 points at day’s close.

Call Rates and Bonds

The interbank call money rates, the rate at which banks borrow short term money from each other, closed higher at 7.65 per cent from Thursday’s close of 6.78 per cent.

Amid less movement during the day, the yield on benchmark government security 8.83 per cent (maturing in 2023) ended a tad softer at 8.83 per cent from previous close of 8.84 per cent compared with previous close. The price of the security ended at Rs 99.95 (from Rs 99.92 on Thursday).

Beena.parmar@thehindu.co.in

(This article was published on January 3, 2014)
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