A virtual deregulation of diesel prices announced by the Government propelled the rupee to a two-week high of 54.39 against the dollar at close on Thursday.
This move was interpreted as positive by the markets as it will allow the Government to cut its subsidy bill and control its yawning fiscal deficit. The domestic unit opened marginally lower at 54.73, against the previous close of 54.69, as investors remained cautious ahead of the US earnings season.
Intraday, the rupee moved in a wide range of 54.78 and 54.22.
A better-than-expected performance by key US companies might increase the investors’ confidence in dollar, thereby undermining the Indian rupee.
On the global front, currency traders will also look at China, which will release a series of key economic data including the fourth-quarter gross domestic product figures, on Friday.
Call rate dips, bond rises
The interbank call money rates closed at 8.15 per cent from its previous close of 8.20 per cent on Wednesday.
The 8.15 per cent government security, which matures in 2022, closed sharply higher at Rs 102.04, while yields softened to 7.84 per cent. It had closed at Rs 101.75 (yield: 7.88 per cent) on Wednesday.