Breaching above 61 levels, the rupee ended at a three-week high of 61.94, stronger by 50 paise due to easing inflation data and weaker American currency amid dollar selling by foreign banks. India’s wholesale price index (WPI) inflation, released on Friday, eased significantly to an eight-month low of 5.05 per cent in January, from 6.16 per cent in December, providing considerable relief to policymakers battling high inflation and weaker growth rate. The domestic unit opened stronger at 62.28/dollar and declined to 62.36 in the morning session of trading. However, it continued to strengthen to its closing value (61.94) on persistent dollar demand and positive inflation data. A higher closing for the domestic equity market also aided the Indian currency. The BSE-benchmark Sensex closed 173.50 points higher (0.86 per cent) at 20,366.82 points.

Call rates, bond yields fall

The inter-bank call money rate, the interest rate at which banks borrow money from each other to overcome short-term liquidity mismatches, ended weaker at 8.80 per cent from Thursday’s close of 9.10 per cent. Yield on the 10-year benchmark 8.83 per cent Government security, maturing in 2023, softened back to 8.81 from 8.86 per cent. Bond prices rose to ₹100.11 from ₹99.75. Bond prices and yields move in the opposite direction.

(This article was published on February 14, 2014)
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