Rupee ends weaker for 5th consecutive day

Our Bureau | | Updated on: Mar 12, 2018


Heavy dollar demand from importers led to the rupee closing lower for the fifth consecutive trading session, down 46 paise at 63.72 against the dollar on Tuesday.

The domestic unit opened 9 paise lower at 63.35 to a dollar after ending at a two-month low of 63.26 against the American currency on Monday. The unit continued to decline during the day on continuous demand for the greenback .

Intra-day, it moved in the range of 63.35-63.83 to a dollar.

“There is lot of oil demand in the market and hence companies are persistently buying dollars,” said a treasury head of a public sector bank.

About 30-40 per cent of the dollar requirement by importers is coming through the open market and not via the special window provided by RBI, the finance ministry had said last week. In addition, if the US starts withdrawing its fiscal stimulus in January as against the market expectation of April, it will weigh on the rupee sentiment, the bank official said.

Moreover, the October consumer price inflation, at 10.09 per cent from 9.84 per cent in September,will add to the rupee woes in the week ahead.

According to the official, inflation still remains a worry. Interest rates are likely to remain high, affecting credit growth in the banking system, and putting pressure on the currency .

Call rates, G-secs

The overnight call money rates, the rate at which banks borrow short-term funds from each other, weakened a tad to 8.70 per cent from the previous close of 8.75 per cent.

Yield on the 10-year benchmark 7.16 per cent 2023 government bond hardened to 9.05 per cent from Monday’s close of 8.95 per cent. Bond prices were down to Rs 88.08 from Rs 88.66. They are likely to remain weaker, and may impact the treasury income of banks.

Published on November 12, 2013
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