The rupee closed weaker at 59.43 against the dollar as investors turned cautious ahead of the first-quarter review of the monetary policy tomorrow.
Also, month end demand for the American unit from oil importers hurt the Indian currency.
More structural reforms and control on the current account deficit will be needed to control the rupees’ fall.
"Recent liquidity tightening measures taken by the RBI to curb volatility in the exchange rate provide, at best, some breathing time. This strategy will succeed if reinforced by structural reforms to reduce the current account deficit (CAD) and step up savings and investment," central bank said in its macroeconomic and monetary review, released today.
The Indian unit opened at 59.13 from Friday’s close of 59.04.
Intraday, the rupee moved between a high of 59.13 and a low of 59.44, respectively.
Call Rates, G-Sec spurt
The interbank call money rates, the rate at which banks borrow from each other, closed at 10.05 per cent from previous close of 9.75 per cent.
The benchmark 7.16 per cent government security, which matures in 2023, closed higher at Rs 93.52 from previous close of Rs 93.31. Yields softened to 8.13 per cent from previous close of 8.16 per cent.
satyanarayan.iyer@thehindu.co.in
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