The rupee declined to 60.27 against the dollar due to demand for the American currency as sentiments turned negative after the Malaysian Airline crash on Thursday.

Emerging markets lost investors’ interest after news of the Malaysian airlines jet being shot down at the Ukraine-Russia border sending jitters among risky assets globally.

On Friday, the Indian currency opened weaker at 60.41 as against the previous close of 60.18 per dollar on weaker Asian currencies and capital outflows from the domestic equity markets.

It declined further to 60.45 after which the rupee regained to 60.24 as equity markets saw mild foreign inflows as the BSE-benchmark Sensex recovered to close higher by 80 points at 25,642.

“Dollar demand from oil and defence related purchases will continue to drive the rupee towards a downward bias. The market resistance is at 60 levels. Once it breaches the 60 levels, the rupee could gain to around 59.85 per dollar,” said Prabakaran KA, Head - Forex Business at UAE Exchange and Financial services.

For the next week, the rupee will continue to trade around 60.30 against the American dollar, he added.

Call and Bonds drop

The inter-bank call money rate, the rate at which banks borrow short-term funds from each other to tide over liquidity mismatches, ended at 7.08 per cent from the previous close of 7.81 per cent on Thursday. Intra-day, it moved between 7 per cent and 8.50 per cent.

The yield on the benchmark bond 8.83 per cent government bond maturing in 2023 ended at 8.76 per cent as compared to previous close of 8.73 per cent. The price ended at Rs 100.36 from Rs 100.65 on Thursday. Bond yields and prices move in opposite directions.

comment COMMENT NOW