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The rupee ended on Monday a tad weaker at 61.31 against the dollar amid a narrow movement and weak domestic equity markets as European banks fail the stress test. However, improved sentiment from upbeat US data and smaller-than-feared capital shortfalls at European banks limited the fall in the rupee.
The domestic unit’s previous close was at 61.28 on Wednesday. Currency markets remained closed on Thursday and Friday on account of festival.
On Monday, the unit opened stronger at 61.19 after which it declined to 61.36 per dollar offset by weaker local shares and caution ahead of the US central bank decision.
The US Federal bank’s meeting ending on Wednesday is expected to end its government bond purchases, while giving accompanying assurances that it will respond if a global downturn threatens the US economy.
Analysts fear this could impact the emerging market currencies including the rupee adversely.
Call rates and Bonds
The interbank call money rate, the rate at which banks borrow short term funds from one another, ended at 8.25 per cent. Intra-day, it moved in the 8.00 per cent to 8.80 per cent range.
The yield on 10-year benchmark 8.40 per cent government security, maturing in 2024, ended at a year’s low of 8.31 per cent (last seen in September 2013) from the previous close of 8.35 per cent. The price of the security ended at Rs 100.53.
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