The rupee on Wednesday declined to 54.43 against the dollar as trading in the foreign exchange market was overshadowed by uncertainties on domestic growth and weak equity markets.
The Indian unit opened lower at 54.42 from Tuesday’s close of 54.26 due to a weak opening in the equity markets. It moved in the 54.34 to 54.46 range during the day.
“Growing concerns of widening current account deficit and political uncertainty weighed on the investor sentiments,” a dealer said.
The BSE-benchmark Sensex ended 239 points down, or 1.26 per cent, at 18,802.
HSBC said that large current account deficit will continue to remain a source of ‘discomfort’ for the market, thereby limiting gains for the rupee. In addition, gold prices touched a 10-month low adding to the Indian currency’s woes. While acknowledging bureaucratic inertia and corruption as being problems, Prime Minister Manmohan Singh said that he was hopeful that GDP growth in FY14 will be 6.7 per cent and the country could get back to 8 per cent growth thereafter. However, these comments failed to make positive impact on the investors.
Call drops, bonds rise
The inter-bank call money rates closed lower at 6.75 per cent from its previous close of 7 per cent on Tuesday. Intra-day, the call money market moved in the 6.60-7.65 per cent range.
The 8.15 per cent government security, which matures in 2022, ended higher at Rs 101.18 from a close of Rs 100.99, while yields lowered to 7.96 per cent from 7.99 per cent.