Rupee up 9 paise on strong equities

Our Bureau Updated - December 20, 2013 at 10:04 PM.

RUPEE

The rupee ended nine paise stronger at 62.03 against the dollar on stronger domestic equity market and foreign inflows. The domestic unit opened weaker at 62.40 as the market factored in late Wednesday’s news on gradual tapering of the quantitative easing of the US fiscal stimulus programme by $10 billion every month.

However, the unit continued to trade higher during the day with experts maintaining that Indian markets are better prepared to handle tapering now than in August when the rupee had touched its lifetime low of 68.80 against the American currency.

The US had been making statements of expected tapering as its economy improves. The tapering is likely to limit inflows into the emerging markets such as India. However, Reserve Bank of India’s two special concessional swap widows announced in mid-July helped mobilise $34 billion to forex reserves through banks.

This has helped India to be in a better position to tackle the US tapering.

During the day, the rupee continued to gain to 62.02/$.

The benchmark BSE-Sensex ended stronger by 371.10 points (1.79 per cent) at 21,079.72 points. This boosted the rupee sentiments.

Treasury heads expect the rupee to trade in the 61.50-63 per dollar range this month.

Call rates, bond prices weaken

The inter-bank call money rates, the rates at which banks borrow short-term funds from each other, ended a tad lower at 8.78 against Thursday’s close of 8.75 per cent.

The widely traded 8.83 per cent government security, which matures in 2023, ended lower at Rs 100.20 from the previous close of Rs 100.55. Yield on the security hardened to 8.79 per cent from 8.74 per cent.

>Beena.parmar@thehindu.co.in

>deepa.nair@thehindu.co.in

Published on December 20, 2013 10:05