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The rupee ended slightly lower at 62.60 against the dollar as the markets remained jittery ahead of the current account deficit data that was released by the Reserve Bank of India. The Indian unit opened higher at 63 from Friday’s close of 62.50.
“There are inflows into the market, ever since the Reserve Bank liberalised the swap window option for foreign investors,” said a top treasury official with a public sector bank. He did not want to be quoted as the RBI has barred dealers from airing their views on the rupee.
It is estimated that upwards of $3 billion have trickled in the past two weeks, he said. “It gives an indication that the RBI has the power to hit back, if the rupee slumps further”
He added that the bank expects the rupee to trade in the range of 61 to 62 in the remainder of the week.
India’s current account deficit for April to June quarter rose to $21.8 billion, or 4.9 per cent of the gross domestic product from $16.9 billion (or 4 per cent), a year ago.
This, however, was lower than some analysts’ estimate of $23 to $25 billion. This could lend further support to the rupee.
Finance Minister, P.Chidambaram, has said that the current account deficit will not exceed $70 billion for the full year.
Call rates flat, G-Sec yields harden
The inter-bank call money rate, the rate at which banks borrow from each other to meet their short-term fund requirement, closed flat at 9.45 per cent.
The 7.16 per cent government security, which matures in 2023, closed lower at Rs 89.68 from the previous close of Rs 90. Yields hardened to 8.77 per cent from previous close of 8.71 per cent.
satyanarayan.iyer@thehindu.co.in
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