The Indian rupee ended flat on Wednesday at 62.24 against the dollar after paring gains from the Moody’s upgradation of India’s rating outlook to positive from stable.

Earlier in the day, Moody’s Investors Service affirmed India’s Baa3 rating, the lowest investment grade, and revised the outlook citing improving economic prospects.

The local unit opened at 62.16 per dollar (as against 62.24 on Wednesday) on the back of heavy capital flows in the opening trade of the domestic equity market.

Thereafter, some mild outflows and likely RBI intervention prompting banks to buy dollars weighed on the rupee, which declined to 62.29.

“Moody’s outlook on India helped a bit but the gains could not be sustained. Also, the RBI is likely to have intervened which limited any sharp movement,” said a dealer with public sector bank.

Further, BSE-benchmark Sensex recovered to end at a near 1-month high of 28,885.21, up by 177.46 points (0.62 per cent) over the previous close.

This helped the rupee also recover a tad to 62.24 per dollar at the Interbank Foreign Exchange Market.

Bond and Call Rates

The yield on India’s 10-year benchmark bond closed a tad softer at 7.77 per cent from the previous close of 7.78 per cent. The price of the bond also remained was up marginally at Rs 104.07 from Rs 103.99. Bond yields and prices move in opposite directions.

The interbank call money rate, rate at which banks lend each other to meet overnight liquidity mismatches, closed higher at 7.55 per cent from Wednesday’s close of 6.50 per cent. Intra-day, it moved between 6.50 and 7.75 per cent range.

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