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Snapping the five-day gaining streak, the rupee pared early gains to end lower at 51.85 against the dollar due to demand for the greenback, especially from a private equity player. According to dealers, the Carlyle Group’s stake sale in mortgage lender HDFC weakened the rupee against the American currency. This is because the seller would have to convert the sale proceeds into dollars ($841 million) for remittance overseas. The Indian unit opened stronger at 51.46 from Thursday’s close of 51.75 after the second round of big-ticket reforms approved by the Cabinet boosted market sentiments. After touching a near six-month high of 51.41 on higher foreign capital inflows, the rupee reversed its tide to an intra-day low of 52.02 per dollar on heavy dollar buying. “The Indian currency is likely to stay around 51-53 levels in the next 2-3 months,”' said Ashish Parthasarthy, Head of Treasury, HDFC Bank. Experts say the rupee can sustain the current levels in the longer term provided the intent of the reform announcements is translated into projects and investments.
Call rates and G-Secs
The overnight call money rates eased substantially to close at 7.10 per cent due to ample liquidity from Thursday’s close of 7.75 per cent. Intra-day it moved in 7.10 to 8.05 per cent range. The 10-year benchmark 8.15 per cent government bond closed lower at Rs 99.92 (yield: 8.16 per cent) from its previous close of Rs 100 (8.15 per cent) on Thursday.
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