The rupee ended slightly higher at 53.82 as the dollar index weakened against world’s major currencies. The local unit had closed at 53.85 to a dollar on Tuesday.
The weak trade data, which showed India’s trade deficit at $20 billion, did not have any immediate impact on the Indian unit. However, a higher trade deficit data for the months of October, November and December points at a widening current account deficit for the third-quarter of the current fiscal. This could exert a significant downside pressure on the rupee. On Tuesday, the rupee had breached the 54-level mark and touched a low of 54.07 after weak industrial output data cast doubts on faster recovery of the Indian economy. Brent crude, which is used by oil companies to make petrol, diesel and kerosene, turned costlier on the international exchanges. Therefore, oil importers might rush to cover for their imports, thereby exerting downward pressure on the rupee.
Call, bonds rates up
The interbank call rates closed higher at 7.85 per cent from the previous close of 7.75 per cent. The 8.15 per cent government security, which matures in 2022, closed higher at Rs 101.98 (yield: 7.84 per cent) from Tuesday’s close of Rs 101.82 (yield: 7.86 per cent).