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The rupee ended stronger at 54.18 against the dollar after January factory output data showed recovery in Asia’s third largest economy.
The local unit opened higher at 54.29 from previous close of 54.41, after export data for February released on Monday pointed to a lower trade deficit figure.
During the day, the rupee fell to a low of 54.39 after the government announced retail inflation data. February month’s retail inflation data rose to 10.91 per cent (from 10.79 per cent in January) pouring cold waters over market hopes of a possible rate cut by the Reserve Bank of India in its mid-quarter policy review on March 19.
In the day’s ahead, the impending stake sale in state-run Nalco is also likely to draw more dollars into the market. This could have a strengthening impact on the rupee.
Call rates, G-Sec
The interbank call money rates closed lower at 7.80 per cent from previous close of 7.85 per cent.
As hopes of rate cut faded, the 8.15 per cent government security, which matures in 2022, closed lower at Rs 101.67 from previous close of Rs 101.97. The yields hardened to 7.89 per cent from previous close of 7.84 per cent.
satyanarayan.iyer@thehindu.co.in
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