The rupee ended 32 paise weaker at 66.02 per dollar on Monday due to dollar demand from importers and lower GDP growth data announced last week.

India's GDP (gross domestic product) growth decelerated to 4.4 per cent — the slowest pace of expansion since the 2008 meltdown — in the first quarter (April-June) of the current fiscal.

The Rupee declined to 66.32 in early trading session and later appreciated to 65.70 on mild dollar selling.

Further, the Reserve Bank of India had announced a special dollar window for oil retailers, which helped ease the offshore non-deliverable forward (NDF) contracts.

“The RBI measures limited the volumes in the currency market by more than half. Hence, the volatility reduced to some extent. Also, the RBI did not intervened for the first time in many days,” said a dealer with a nationalised bank.

The rupee shed 40 paise in the opening trade at 66.10 against the previous close of 65.70 per dollar. The domestic unit had ended higher on Friday after RBI intervention by asking banks to sell dollars.

The rupee saw sharp movements last week. It had hit a historic low of 68.80 against the US dollar on August 28. It had dropped 3.7 per cent during last week alone.

The Ministry of Finance had said that the rupee depreciation is not reflective of any weakness in the economy. Also the rupee is heavily under-valued at the moment and it is being addressed.

Though a stronger dollar and dollar demand from importers limited the rupee gains, investors are hoping for positive measures after the new RBI Governor assumes charge on September 5.

Call rates eases; G-Secs rises

The inter-bank call money rate, the rate at which banks borrow money from each other to meet their short-term fund requirements, ended at 10.25 per cent from its previous close of 10.45 per cent.

The 7.16 per cent government security, which matures in 2023, closed higher at Rs 91.47 from Friday’s close of Rs 90.65 .Yields softened to 8.47 per cent from 8.60 per cent.

beena.parmar@thehindu.co.in

(This article was published on September 2, 2013)
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