Rupee up 18 paise at 62.51

The rupee rose to a two-week high before closing at 62.51, 18 paise above the previous close tracking outflows from the domestic equity market amid the US central bank’s dovish stance on interest rate hike.

The domestic currency had closed at 62.69.

It strengthened to a 2-week high of 62.37 per dollar in its opening trade as the shift in rate expectations had hit the dollar. 

And the rupee gained further 2 paise to 62.35 after which capital outflows due to profit booking in the equity markets dragged the rupee to 62.67 amid a weaker dollar.

The BSE-benchmark Sensex closed lower at 28,470, weaker by 152 points (0.53 per cent) over its previous close. 

After the Fed statement, dollar tumbled toward its biggest one-day decline against the euro since March 2009. Analysts expect the Fed to not rush through the rate hikes.

Following a policy-making meeting last night, the US Federal Reserve did not hike rates but opened the door for a rate hike perhaps as early as June. Fed lowered both US growth estimates and its forecasts for interest rates and inflation in the longer term.

Bonds yields soften; Call Rates up

The yield on 10-year benchmark 8.40 per cent Government security maturing in 2024, softened to 7.75 per cent from Wednesday’s close of 7.79 per cent. During the day, it hardened to 7.76 per cent while softened to 7.73 per cent, respectively.

The price of the security ended higher at Rs 104.21 from Rs 103.97. The prices and yields of bonds move in opposite direction.

The interbank call money rate, the rate at which banks lend to each other to overcome overnight liquidity mismatches, ended higher at 7.70 per cent from the earlier close of 6.65 per cent. It moved between 7.30 to 7.80 per cent range.

COMMENT NOW