Paring initial losses, the rupee recovered 18 paise to 54.17 against the dollar ahead of the monetary policy review by the Reserve Bank of India today.
Finance Minister has hinted that the RBI should take comfort from the government's efforts to cut the fiscal deficit and reduce key policy rates. Hence, forex market investors’ expectations of a cut by the RBI boosted the sentiments.
The Indian unit opened lower at 54.29 from two-week high close of 54.02 on Friday on the Interbank Foreign Exchange market. Intra-day, weaker domestic equity markets and dollar buying from importers and banks dragged the rupee to 54.35 per dollar.
The BSE-benchmark Sensex closed lower by 134 points (0.69 per cent) at 19,293. A rate cut by the central bank may further support the rupee.
Call rates, G-Secs
The interbank call money rates closed lower at 7.70 per cent from their previous close of 7.80 per cent on Friday. Intra-day, the call rates moved in the 7.25 to 8 per cent range.
The 8.15 per cent government security, which matures in 2022, ended lower at Rs 101.70 from a close of Rs 101.84, while the yields moved up to 7.88 per cent from 7.86 per cent.