Rupee ends weaker at 62.26 a dollar

Our Bureau Updated - March 04, 2015 at 07:58 PM.

rupee

The rupee pared morning gains to end weaker at 62.26 against the dollar on Wednesday after public sector banks bought dollars taking cues from the heavy outflows from the domestic equity markets.

The Indian currency opened at 61.66 from Tuesday’s close of 61.92 driven by an early morning announcement of 25 basis points policy rate cut by Reserve Bank of India (RBI). Meanwhile, public sector banks bought dollars, likely on behalf of the RBI to prevent a sharp rise in the Indian unit.

After crossing 30,000 mark, the BSE-benchmark Sensex lost 213 points (0.72 per cent) to close at 29,380.73 on Wednesday. This weighed on the rupee which declined to 62.27 near the closing trade.

 “Rupee should be in the broad range of 61 to 63 per dollar in the next 3-6 months. We should see significant increase in the balance of payments surplus so that will put appreciation pressure on the rupee,” said Ashish Parthasarthy, Head treasury, HDFC Bank. In the shorter term, the rupee could be 61.50 to 62.50 for some time, he added.

During the day, the rupee moved in the range of 61.65 and 62.27 per dollar at the Interbank Foreign Exchange market.

 

Call and Bonds

The interbank call money rate, rate at which banks lend to each other for overnight liquidity mismatches, ended weaker at 7.20 per cent from a close of 7.40 per cent on Tuesday. Intra-day, the call money market moved in the range of 6.95 per cent and 7.70 per cent.

The 10-year benchmark 8.40 per cent government bond, maturing in 2024, jumped to close higher at Rs 104.70 from the previous close of Rs 104.24. The yield on the bond softened to 7.68 per cent from Tuesday’s 7.75 per cent. Bond prices and yields move in opposite directions. Parthasarthy expects the bond yields to trade in the range of 7.60 per cent in the month ahead.

Published on March 4, 2015 04:25