The rupee closed marginally higher at 60.03 after surging for the second consecutive session on Friday to a near one-month high of 59.93 against the dollar.

The currency rose to 59.93 to the dollar driven by a sharp rally in the domestic equity markets riding high on sentiments of the upcoming Lok Sabha election results. The RBI was spotted buying dollars throughout the day to prevent the rupee from strengthening sharply below the 60 levels, a dealer said.

The domestic unit opened a tad weaker at 60.09 as against Thursday’s close of 60.07 per dollar at the Interbank Foreign Exchange market. During the day, the rupee moved 17 paise in the range of 59.93 to 60.10 per dollar levels.

Equity markets surged 3 per cent to a record high on hopes of that the opposition Bharatiya Janata Party (BJP) would win a majority in elections ending next week.

After it soared over 700 points, BSE-benchmark Sensex ended at 22,994.23 points, up 540 points over its previous close, while NSE-Nifty closed 200 points higher at 6,868.80 points.

The rupee is likely to remain range bound as it tracks the equity markets ahead of the upcoming election results and at the same time reports suggest that the RBI is trying to keep the rupee around 60 levels.

Call Rates; Bond yields

The overnight call money rate (the rate at which banks borrow money from each other to overcome short-term liquidity mismatches) ended higher at 8.70 per cent from previous close of 7.05 per cent on Thursday.

The yield on 10-year benchmark 8.83 per cent bond, maturing in 2023, softened a tad to 8.74 per cent from Thursday’s close 8.75 per cent. Bond prices rose to Rs 100.53 as against Rs 100.45. Bond yields and prices move in opposite directions.

> beena.parmar@thehindu.co.in

Related Topics