The rupee weakened five paise on Tuesday to end at 61.92 a dollar against the previous close of 61.87 on sustained demand for the American currency from banks and importers. After opening almost flat at 61.86 a dollar, in intra-day trade, the domestic unit touched a high of 61.79 and a low of 61.94. India’s January fiscal deficit overshot the full-year target as the gap swelled to ₹568 crore, or 107 per cent of the target for the 2014-15 fiscal year ending in March. According to a report by Angel broking, the rupee traded with a downward bias following large fiscal deficit for 2014-15.
Bonds, call rates end lower
The 8.40 per cent government security maturing in 2024 closed 11 paise lower at ₹104.24 from ₹104.35 previously, while its yield edged up to 7.75 per cent from 7.74 per cent. Reported comments by the RBI Governor that India is witnessing an ‘avalanche’ of capital flows as central banks around the world are reducing interest rates to very low levels but the RBI is unable to cut interest rates quickly due to ‘high’ inflation impacted sentiment in the government securities market. The overnight call money rates ended higher at 7.40 per cent from Monday’s closing level of 7 per cent.