Forex

Rupee ends at 59.70 a dollar

Our Bureau Mumbai | Updated on March 12, 2018 Published on May 13, 2014

The rupee zoomed to a near ten month high to close at 59.70 against the dollar after the exit polls projected a government with a stable majority at the centre. The domestic unit had closed at 60.05 per dollar on Monday.

The markets cheered up to the exit poll prediction, released late Monday evening, of a comfortable victory for the Narendra Modi-led NDA Government in the national elections. The sentiment continued on Tuesday as the rupee jumped 33 paise in its opening trade on heavy capital flows.

After breaching the 24,000 levels, the BSE-benchmark Sensex ended at 23,871 points, surging 320 points (1.36 per cent), while NSE’s Nifty rose 94 points (1.35 per cent) to close at 7,108.75 points.

The rally helped the rupee appreciate to 59.59 per dollar at the Interbank Foreign Exchange market. However, broader gains were capped as the RBI bought dollars to limit the sharp appreciation in the rupee, currency dealers said. The rupee declined to 59.92 during the day.

“This is a good opportunity for the RBI to build its reserves. After the election results, the rupee may appreciate to 58 levels, but it would not be sustainable. A decisive mandate will cap the rupee at 61 levels,” said Mohan Shenoi, President - Group Treasury at Kotak Mahindra Bank.

The final results of the polls will be declared on Friday. Hence, Shenoi added that the Indian rupee is likely to trade in the broad range of 58 to 61 per dollar levels in the medium term.

Call rates and G-Secs

The overnight call money rate (the rate at which banks borrow money from each other to overcome short-term liquidity mismatches) ended higher at 9 per cent from the previous close of 8.95 per cent on Monday.

The yield on 10-year benchmark 8.83 per cent bond, maturing in 2023, hardened to 8.78 per cent from Monday’s close of 8.72 per cent. Bond prices dropped to Rs 100.29 from Rs 100.65. Bond yields and prices move in opposite directions.

>beena.parmar@thehindu.co.in

Published on May 13, 2014

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