The rupee appreciated sharply to close at a three-month high of 53.30 against the dollar as the government’s offer to sell 10 per cent stake in Oil India to domestic and foreign investors on February 1 attracted foreign inflows. The rupee also gained on a stronger euro and as the domestic sentiment remained buoyant, a day after the Reserve Bank of India cut the key policy rate and the cash reserve ratio.
The rupee opened stronger at 53.51 against the previous close of 53.77. In its third quarter review of monetary policy, the Reserve Bank of India has warned about the worsening current account deficit and the difficulties in financing it. In the first six months of the current fiscal, CAD was at 4.7 per cent of gross domestic product. A further worsening of CAD, which is expected because of the yawning trade deficit, is likely to put downward pressure on the rupee in the days ahead.
Call rates, G-Secs
The inter-bank call money markets closed lower at 7.85 per cent against the previous close of 8 per cent. The 8.15 per cent government security, which matures in 2022, closed sharply lower at Rs 101.68 (yield: 7.89 per cent) from the previous close of Rs 101.97 (yield: 7.84 per cent).
satyanarayan.iyer@thehindu.co.in
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