Rupee drops 26 paise

Our Bureau Updated - October 29, 2012 at 09:44 PM.

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Falling to over a month low, the rupee on Monday weakened to close at 54.08 against the dollar on the back of a dragging euro and dollar demand from oil importers.

The Indian unit had opened lower at 53.82 from Thursday’s close (the forex and money markets were closed on Friday) of 53.57 due to weak sentiments on the monetary policy and month-end dollar demand from importers and banks.

“Uncertainty in the Euro Zone over Spain and Greece led the euro to weaken against the dollar putting pressure on the rupee. Rupee also fell due to some oil buying by importers,” said a dealer with a public sector bank.

Intra-day, the Indian unit moved in the range of 53.75 and 54.09 per dollar.

The market is hoping for a rate cut in the RBI's monetary policy on Tuesday which could help rupee see some gains. However, rising inflation will continue to factor in the policy decision to go against a cut, analysts say.

Call Rates and G-Secs

The overnight call money rates closed lower at 8 per cent. The call rates had opened flat from its previous close of 8.10 per cent on Thursday.

The 10-year benchmark 8.15 per cent government security, which matures in 2022, closed lower at Rs 100.09 (yield: 8.13 per cent) from Thursday's close of Rs 100.13 (yield: 8.12 per cent).

Beena.parmar@thehindu.co.in

Published on October 29, 2012 04:49