The rupee on Wednesday declined 12 paise to close at 54.30 against the dollar on weaker domestic equity markets ahead of inflation data due on Thursday.

After opening almost flat from Tuesday’s close of 54.18, the Indian unit strengthened to 54.03 the Interbank Foreign Exchange market.

However, dollar demand from banks and importers along with lower domestic and global equity markets weighed on the unit to an intra-day low of 54.36 per dollar.

The BSE-benchmark Sensex dropped by 202 points (down by 1.03 per cent) amid heavy capital outflows. Also, a downside in global markets and euro were a drag on the rupee.

With higher inflation levels, investors are not expecting a rate cut by the Reserve Bank of India in its monetary policy on March 19. This could further weaken the rupee.

Call rates, G-Sec

The interbank call money rates closed higher at 7.90 per cent from its previous close of 7.80 per cent. During the day, it moved in the range of 7.60 to 7.90 per cent range.

The 8.15 per cent government security, which matures in 2022, ended lower at Rs 101.57 from a close of Rs 101.67 on Tuesday, while yields marginally increased to 7.90 per cent from 7.89 per cent.

beena.parmar@thehindu.co.in

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