The rupee closed weaker by 105 paise at 60.48 against the American unit in the absence of a concrete guidance on future policy action by the Reserve Bank of India.

The Indian unit plunged below the 60 level, shortly after the Reserve Bank of India kept the key policy rates and the cash reserve ratio unchanged.

Also, month end demand for the American unit from oil importers impacted the rupee.

Intraday, the rupee moved between a low of 60.54 and a high of 59.53.

The rupee shed 22 paise to 59.65 per dollar, when it opened, against the previous close of 59.43.

The Reserve Bank of India has indicated that more structural reforms and control on the current account deficit will be needed to control the rupee’s fall.

“Recent liquidity tightening measures taken by RBI to curb the volatility in exchange rates provide, at best, some breathing time. This strategy will succeed if reinforced by structural reforms to reduce the current account deficit (CAD) and step up savings and investment,” the central bank had said in its macroeconomic and monetary review released on Monday.

However, the central bank did not specify a definite timeline as to when the latest liquidity tightening measures will be withdrawn.

“They (measures) will be rolled back in a calibrated manner as stability is restored to the foreign exchange market, enabling monetary policy to revert to supporting growth with continuing vigil on inflation,” Governor, D.Subbarao said in his monetary statement.

Call rates soften, G-Secs yields harden

The interbank call money rates, the rate at which banks borrow from each other, opened higher at 10.25 per cent against the previous close of 10.05 per cent.

The benchmark 7.16 per cent government security, which matures in 2023, closed sharply lower at Rs 92.72 from the previous close of Rs 93.52. Yields hardened to 8.25 per cent from the previous close of 8.13 per cent.

The absence of a definite timeline to withdraw the liquidity tightening measures impacted the yields.

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