The Indian rupee closed weaker at 57.87 against the dollar on high demand for the American currency from oil importers and some corporates.
The rupee opened 18 paise lower at 57.71 from previous close of 57.53 at the Interbank Foreign Exchange market.
Over the next two days, the currency market traders will tune into the development of the US Fed’s monetary policy meeting starting tomorrow.
Renewed dollar demand from banks and importers in view of firm dollar overseas mainly affected the rupee value against the dollar, a forex dealer said.
Earlier in the day, the Reserve Bank of India kept the key policy rates and cash reserve ratio unchanged. The markets had already factored in this and to that extent there was not much impact on the Indian unit, a chief dealer with a public sector bank said.
The rupee continues to face challenges from India’s high Current Account Deficit (CAD) and sudden stoppages and reversals on capital flows.
Call rates, G-Sec
The interbank call money rates closed higher at 7.25 per cent from previous close of 7.15 per cent.
The 8.15 per cent government security (G-Sec), which matures in 2022, closed higher at 104.51 from the previous close of Rs 103.98. Yields softened to 7.45 per cent from previous close of 7.53 per cent.
The new benchmark 7.16 G-Sec which matures in 2023, closed at Rs 99.33 and the yields were 7.25 per cent. The volumes were, however, lower in this G-Sec because of lesser availability of this paper in the market.
“The volumes of the 7.16 per cent G-Sec will increase by August by which time the Reserve Bank of India would have completed four more auctions of the G-Sec,” NS Venkatesh, Head – Treasury, IDBI Bank.