The rupee closed stronger at 61.24 against the dollar after the US Congress raised its debt ceiling limit in the nick of time to avert a debt default by the world’s largest economy. US President Barack Obama also signed a Bill that ended the 16-day government shutdown that has caused billions of dollars in losses.

However, a fall in domestic equities capped the gains for the Indian unit. The rupee, which had closed at 61.85 on Tuesday, opened higher at 61.54. Abhishek Goenka, Founder & CEO, India Forex Advisors, said the rupee traded stronger against the dollar as the last minute deal in the US helped lift sentiments in the global markets.

“The US dollar index was seen weakening and falling below the key level of 80. Going ahead, if the US dollar does not show sustained recovery in the coming few days, then we might see the rupee continuing with its gains,” he said.

The rupee moved in the 61.23-61.72 range in intraday trade.

Call rates, bond yields soften

The inter-bank call money rate, the rate at which banks borrow from each other to meet their short-term fund requirements, closed at 8.95 per cent against the previous close of 9 per cent.

The 7.16 per cent government security, which matures in 2023, closed higher at Rs 90.70 against the previous close of Rs 90.35.

The yields softened to 8.60 per cent from 8.66 per cent. Bond yields and prices move in opposite directions.

(This article was published on October 17, 2013)
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