Despite trimming some of the early losses, the rupee on Wednesday closed lower at 55.11 against the dollar on a weaker euro and uncertainty on reform policy measures ahead of the Winter session.

The Indian unit had opened weaker at 55.13 from Tuesday’s close of 55.09 due to dollar demand from oil importers and a marginal weakness in the Asian and domestic markets.

The rupee continued to weaken further touching a low of 55.36 in the early trades before gaining to 55.06 per dollar in the second session as the euro declined after the Euro Zone finance ministers, the International Monetary Fund and the European Central Bank meeting ended without any agreement on the next tranche of loans to Athens, signalling no developments on Europe’s debt crisis.

Further, with the winter session due to start on Thursday, uncertainty grew over key economic reform proposals such as the foreign direct investment (FDI) in insurance and multi-brand retail and some crucial Bills in the insurance, pension and banking sector to be discussed in the Parliament.

“Usually, this is a subdued season around this time of the year and hence, less FII inflows will put pressure on the rupee,” said Vivek Mhatre, General Manager, Treasury Branch, Union Bank of India.

The rupee has fallen nearly 3 per cent against the US dollar over the past one month on increased concerns of global risk aversion.

Call rates and G-Secs

The overnight call money rates ended lower at 8 per cent. The rates had opened flat at 8.10 per cent from Tuesday’s close.

Amid less demand and supply, the 10-year benchmark 8.15 per cent Government security, which matures in 2022, ended slightly lower at Rs 99.61 from a close of Rs 99.66, while the yields were almost unchanged at 8.20 per cent.

beena.parmar@thehindu.co.in

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