Hurt by weakness in the domestic equity market, the rupee shed 33 paise to end weaker at 62.60 per dollar against the previous close of 62.27.
The BSE Sensex fell 362.75 points or 1.79 per cent lower at 19,900.96. The NSE Nifty was down 2.04 per cent at 5,889.75.
In intra-day trade, the rupee touched a high of 62.34 and a low of 62.72.
According to a treasury dealer with a public sector bank, the domestic currency was impacted as the RBI last week partially rolled back some of the emergency measures taken to support the rupee. Further, the month-end dollar demand added to the pressure.
“The recovery in dollar index from its lowest level in seven months dented the sentiment for the rupee. The currency is expected to trade weak and it may head lower towards 63.50/64 in the present week,” said Jayant Manglik, President-Retail Distribution, Religare Securities
Bond yields, call rates up
With almost Rs 4,000 crore worth of Government Securities (G-Secs) devolving on underwriters in the bond auction aggregating Rs 15,000 crore, yields on G-Secs rose sharply.
The 10-year benchmark 7.16 per cent government bond, which matures in 2023, rose 28 basis points to 8.85 per cent from the previous close of 8.57 per cent. Prices of the 10-year bond fell to Rs 89.16 against the previous close of Rs 90.8.
Meanwhile, Economic Affairs Secretary Arvind Mayaram put the Government’s borrowing programme in the second half of the current fiscal at Rs 2.35-lakh crore. As originally planned in the Budget, the Government borrowing is on expected lines.
In the government bond auction, underwriters had to buy Rs 4,030 crore of bonds. “The devolvement in the bond auction today was very high due to lack of demand from buyers and short sellers in the market,” said S. Srinivasaraghavan, head of treasury at Dhanlaxmi Bank.
Inter-bank call money rate, the rate at which banks borrow from each other to meet their short-term funding needs, ended higher at 9.50 per cent from the previous close of 9.25 per cent. — Our Bureau