The rupee ended slightly weaker at 63.50 against the dollar as the markets remained cautious ahead of the Government’s release of factory output and inflation data.

The Indian unit resumed its trade a tad stronger at 63.28 against the previous close of 63.38 on Wednesday. The Indian unit was supported as the uncertainty over the situation in Syria seemed to ease, offering hope for more stable crude oil prices in the future. India imports about $12 billion worth of oil every month.

“The rupee will stay around the 63 mark for a while now. At this rate the rupee seems to be fairly valued given the global atmosphere,” a chief dealer of a public sector bank said. The dealer said he does not wish to be named as the RBI has asked dealers of public sector banks to not offer views on the currency as this was adding to volatility.

“I think, the rupee will settle at 62.50 over the next fortnight,” he added.

The factory output data showed industrial output grew 2.6 per cent in July, compared with a decline of 2.2 per cent in June and consumer price index-based inflation eased to 9.52 per cent in August, from 9.64 per cent in July. The figures were released after currency markets closed trading for the day.

This is likely to add some cheer to the markets tomorrow, said dealers.

Intraday, the rupee moved between a high and a low of 62.93 and 63.96, respectively.

Call drops a tad, bond yields harden

The inter-bank call money rates, the rates at which banks borrow from each other to meet their short-term fund requirements, ended a tad lower at 10.20 per cent from the previous close of 10.25 per cent.

Bond yields hardened slightly to 8.49 per cent from the previous close of 8.46 per cent. The 7.16 per cent government bond, which matures in 2023, closed lower at Rs 91.26 from Wednesday’s close of Rs 91.48. Bond yields and prices move in opposite directions.

satyanarayan.iyer@thehindu.co.in

(This article was published on September 12, 2013)
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