The rupee sustained the intra-day rally to end stronger at 54.27 against the dollar due to capital inflows from Bharti Infratel's initial public offering and expected dollar selling from share sale by state miner NMDC.
The local unit had opened higher at 54.40 from Monday’s close of 54.48 per dollar as domestic market indices — the Sensex and Nifty — gathered strength indicating inflows of foreign currency into Indian stocks. Intra-day, it moved in the 54.25 and 54.45 range.
Currency traders will look for cues from the United States, which is actively discussing the fiscal cliff issue.
On the domestic front, the second biggest initial public offering of Airtel’s tower company — Bharti Infratel and stake sale of publicly held mineral exploration company — NMDC is likely to bring more dollars to the Indian shore.
The rupee gains will depend on the amount of these inflows is offset by the demand for the American currency from oil importers and gold buyers. In addition, high trade deficit data released today will continue to weigh on the investor sentiments.
Also, inflation data for November and Reserve Bank’s mid-quarter monetary policy next Tuesday will keep the rupee on the leash.
Call rates up; G- Secs eases
The interbank call rates closed higher at 8 per cent from Monday’s close of 7.90 per cent. The rates traded in the range of 7.60 to 8.10 per cent during the day.
The 10-year benchmark 8.15 per cent government security, which matures in 2022, closed a tad softer at Rs 99.82 from Monday’s close of Rs 99.86, while the yields remained unchanged at 8.17 per cent.
Keywords: Rupee, dollar, euro, foreign currency inflows, forex market, equity market, US fiscal crisis, RBI's monetary policy review, November inflation data, call money market, government security, Bharti Infratel, initial public offering, NMDC stake sale, FIIs, Sensex, Nifty