The rupee ended marginally lower at 62.48 (previous close: 62.42) against the dollar as demand for the American currency from oil importers was high during the day, according to traders.

The Indian unit fell to a low of 62.75, before dollar selling by banks helped it to recover at close.

“At least 30-40 per cent of the dollar demand was being met from the secondary market,” said Srinivasaraghavan, Head-Treasury at Dhanlaxmi Bank, explaining the reason for the rupee’s fall.

The RBI had earlier created a dedicated window for oil buyers from which oil importers could meet their dollar demand. This helped ease some volatility for the Indian unit.

Raghuram Rajan, Governor, RBI has said that whether or not rupee has attained stability can be judged only when the whole of oil-related dollar demand will be met by the market.

In the coming week, dollar inflows and oil demand will dictate the movement of the Indian currency, Srinivasaraghavan said, while pegging the likely movement in the 62.25 to 63.25 range.

In its fourth straight weekly losing session, the rupee has fallen by more than 1.2 per cent.

Also, the gain in the US currency backed by US economic growth data has weighed on the Indian unit.

“On the global front, strong GDP growth posted by the US helped the dollar index to move to its six week high which led to weakness in the Asian currencies, including the rupee,” said Abhishek Goenka, Founder & CEO, India Forex Advisors.

Call Rates up; G-Sec yield hardens

The overnight call money rates, the rate at which banks borrow short term funds from each other, ended slightly higher at 8.80 per cent from previous close of 8.75 per cent.

Yield on the 10-year benchmark 7.16 per cent 2023 government bond hardened to 8.99 per cent from its previous close of 8.85 per cent. The bond prices closed weaker at Rs 88.45 from Rs 89.26.

satyanarayan.iyer@thehindu.co.in

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