The rupee recovered to close at 53.97 against the dollar on selling of the American currency by exporters and some foreign banks.
“The currency markets moved in three distinct phases today — it gained in early trades because of dollar selling by an IT firm and then after the RBI policy review it slumped below 54 levels. Finally, in the last session there was again some dollar selling which helped the rupee to gain,” a chief dealer with a public sector bank said.
On Monday, the rupee had closed at 54.08 on the back of a weak euro and oil-related dollar demand.
Moses Harding, Head Alco and Economic & Market Research, IndusInd Bank, said: “The impact of CRR cut is neutral on rupee exchange rate to extend its consolidation mode at 53.20-54.20.”
Oil-related dollar demand did not weigh much on the exchange rate today.
Call rises; bond drops
The inter-bank call rates closed a tad higher at 8.05 per cent from previous close of 8 per cent.
The 8.15 government security, which matures in 2022, closed lower at Rs 99.17 (yield: 8.18 per cent) from the previous close of Rs 100.09 (yield: 8.13 per cent).
“The 10-year bond yields will get into the consolidation mode at 8.12-8.17 per cent with March 2013 target at 8.02-7.97 per cent,” Harding said.