The rupee rose to a three-week high to end 47 paise stronger at 63.37 to the dollar against the previous close of 63.87 on strong dollar inflows from companies.
In the last five trading sessions, the rupee gained over 265 paise or about four per cent. The rupee has made a turnaround from being the worst performing currency to become the world's best performer in the past five days as investor confidence has surged following a series of steps to boost inflows.
According to Crisil Ratings agency, the rupee could rebound to 60/$ by March 2014 as the current account deficit declines to 3.9 per cent.
“But the currency will remain significantly depreciated as compared with last fiscal,” Crisil said.
In intra-day trade, the rupee touched a high of 63 and a low of 64.2. A series of recent measures by the RBI led to the sharp rise in the domestic unit.
According to dealers, the trade deficit narrowing down to $10.9 billion in August from $14.2 billion a year ago and the easing of Syrian tensions helped the rupee gain.
“The panic selling in the market has now come down. Also, there were large dollar inflows from some corporates and a petrochemical company. The rupee will strengthen to 60 levels in the short term,” said a treasury head of a public sector bank.
Bond yields, call rates ease
Bond yields softened a tad to 8.46 per cent from the previous close of 8.47 per cent. The 7.16 per cent government bond, which matures in 2023, ended lower at Rs 91.48 from the previous close of Rs 91.65. According to Crisil, the 10 year G-Sec yield is estimated to hover around 7.8-8 per cent in 2013-14.
The inter bank call money rates, the rates at which banks borrow from each other to meet their short term fund requirements, fell to 10.25 per cent from the previous close of 10.35 per cent. —