Rupee sheds 10 paise against dollar

PTI Mumbai | Updated on March 27, 2018 Published on March 27, 2018

RBI fixes the reference rate of the rupee at 64.6639 against the US dollar. File Photo   -  The Hindu

The rupee surrendered its strong early gains and ended lower by 10 paise at 64.97 against the US currency, cutting short its three-day upmove on bouts of dollar buying by banks and exporters.

A solid dollar rebound, supported by easing trade war fears and a pick-up in the US Treasury bond yields predominantly kept forex market undertone nervous and prompted the fag-end reversal.

The Indian currency touched a fresh one-month high of 64.73 during early trade. Some trading caution ahead of the fiscal deficit data release tomorrow also weighed on the rupee front.

The rupee opened on a stronger note at 64.76 against Monday’s close of 64.87 at the inter-bank foreign exchange here on steady dollar unwinding and well supported by bullish local equities.

It strengthened further to hit a high of 64.73 briefly - the level not seen since February 23.

However, the upbeat momentum was stalled during the mid-afternoon trade, pressured by the month-end corporate demand for the greenback from corporates. Moreover, currency traders avoided taking huge positions ahead of the long weekend.

After retracing the 65-mark towards the fag-end trade, the Indian unit finally settled at 64.97, showing a loss of 10 paise.

Bonds prices, in the meantime, staged a powerful rally induced by a surprise cut in the government’s borrowing programme for the fiscal year starting April.

The government yesterday announced to borrow Rs 2.88 lakh crore in the April-September period of 2018-19, lower than Rs 3.72 lakh crore it had borrowed in the first half of the current fiscal, and introduce bonds linked to CPI or retail inflation.

The benchmark 10-year bond yield crashed to 7.33 per cent from 7.62 per cent.

The RBI fixed the reference rate for the dollar at 64.7973 and for the euro at 80.7634.

The BSE-Sensex jumped 108 points to close at 33,174.39, while the Nifty rose nearly 54 points to 10,184.15.

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Published on March 27, 2018
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