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Snapping initial losses, the rupee on Wednesday recovered to 53.80 against the dollar due to capital inflows and dollar selling by exporters.
The Indian unit had opened almost flat at 53.96 against the dollar on the back of a firm euro and pressure from month-end dollar demand by oil importers.
Intra-day, it moved between 53.78 and 54.30.
On Tuesday, it had closed at 53.97, recovering from a five-week low to end the session with mild gains on the back of a falling dollar.
“Foreign investment inflows and dollar selling by exporters at the 54 levels pumped the rupee gains,” said N. S. Venkatesh, Chief General Manager and Head of Treasury, IDBI Bank.
In addition, positive domestic equity markets and a stronger euro supported the rupee.
However, the outlook for the local currency remains weak after the RBI left key interest rates unchanged in its second quarter monetary policy.
The central bank has revised its inflation and growth estimates flagging concerns on worsening current account deficit. The Government is likely to announce other policy measures this week.
Call rises; bond weakens
The overnight call money rates ended higher at 8.15 per cent from Tuesday’s close of 8.05 per cent.
The call money market had opened higher at 8.10 per cent and moved in the 8-8.15 per cent range.
The 10-year benchmark 8.15 per cent government security, which matures in 2022, closed weaker at Rs 99.56 (yield: 8.21 per cent) from its previous close of Rs 99.77 (yield: 8.18 per cent) on Tuesday. —
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