The rupee declined to more than one-month low ending at 55.23 against the dollar due to heavy capital outflows and weaker domestic equity markets. On Friday, it had closed at 55.06 per dollar.
The Indian unit opened at 55.01 per dollar due to firm domestic and Asian equity markets. Global equity markets, meanwhile, had soared in the early trades on hopes of a steady recovery of the US economy on the back of relaxation of an earlier draconian draft of new global bank liquidity rules by the Basel Committee of banking supervisors.
“However, the rupee declined to 55.31 during the day on the back of heavy dollar buying from oil and gold importers,” said a chief dealer with a nationalised bank. Intra-day, the currency gained to 54.90 per dollar in the early trades.
Concerns of current account deficit and slowing global economy strengthened the dollar against other currencies.
However, investors expect the rupee to gain in the weeks ahead on hopes of a rate cut by the Reserve Bank of India in its third quarter monetary policy review on January 29.
Call Rates and G-Secs
The inter-bank call money market closed flat from its previous close of 8.05 per cent on Friday. During the day, the call rates traded in the 7.85 per cent to 8.15 per cent range.
The 8.15 per cent government security, which matures in 2022, jumped higher to close at Rs 101.63 (yield: 7.90 per cent) from Friday's close of Rs 101.42 (yield: 7.93 per cent).