The rupee closed almost flat at 57.04 against the dollar. The domestic unit opened at 57 (previous close 57.01), a day after the steps announced by the RBI to shore up the local currency failed to cheer the markets. Analysts and experts said markets were expecting much more from the government and the RBI.
Mr K. Harihar, Treasurer, First Rand Bank, said, “Whether there will be a measurable impact of the RBI’s measures on the rupee is something that you have to wait and watch. The market expectations of the package were too high.”
Among others, the RBI on Monday raised the investment limit for Foreign Institutional Investors in government securities by $5 billion to $20 billion.
In intra-day trades on Monday, the rupee reacted negatively and touched a life-time low of 57.92 against the dollar.
On Tuesday, the local unit swung about 37 paise. It touched an intra-day low and intra-day high of 57.20 and 56.83, respectively, during the day’s trade.
The rupee has depreciated by about 12 per cent in the last three months. It has been hit primarily by high demand for the American currency from oil importers.
Call rates, G-Secs
The inter bank call rates, which opened at 8.20 per cent, softened to 8 per cent at close.
The 8.79 per cent benchmark government security, which matures in 2021, closed at Rs. 102.84 (yield:8.34 per cent) compared with Monday’s close of Rs 102.94 (yield:8.33 per cent).