The rupee closed lower at 54.47 against the dollar on the back of strong demand for the American currency by oil importers and gold buyers.

The rupee went through ups and downs on anticipation of the FDI Bill making it through the Rajya Sabha. When the ruling coalition managed to get the Bill passed, the rupee rose from 54.38 to 54.27.

Soon afterwards, oil importers pitched in to buy dollars at a cheap rate. Due to shallowness in the market a slight spike in volumes is altering the direction in which the rupee is moving, say forex traders.

"When the rupee gained after the Rajya Sabha vote, oil importers immediately took advantage of it. Since the float in the market is so shallow, even a small volume trade changes the direction of the rupee movement," a dealer with a public sector bank said.

Also, dollar demand from gold buyers affected the rupee, he added.

Developments on the global front like the pending discussion and deal on the US fiscal cliff will keep the rupee volatile in the days ahead.

The domestic unit, which opened at 54.28, had closed at a near one-month high of 54.13 on Thursday.

Call rates, G-Secs

The interbank call rates closed lower at 8 per cent from the previous close of 8.15 per cent.

According to CCIL data, the 8.15 per cent government security (G-Sec), which matures in 2022, did not register a single trade because of a shut period announced on the G-Sec by the Reserve Bank of India. “The interest payment on this security falls due on Tuesday. So, the RBI has shut trading on this security to decide on the list of investors who are due to get their interest,” a senior official with a public sector bank said.

The widely traded, 8.33 per cent government security, which matures in 2026, closed higher at Rs 100.66 (yield: 8.24 per cent). It had closed at Rs 100.55 (yield: 8.26 per cent) on Thursday.

satyanarayan.iyer@thehindu.co.in