Rupee ends at 58.50 a dollar

Beena Parmar Updated - May 23, 2014 at 06:01 PM.

rupee

Falling from its 11-month high of 58.31, the rupee weakened a tad against the American dollar to end at 58.50 amid a mix of capital flows into the domestic equity market and dollar buying by banks on behalf of RBI.

The rupee had posted its biggest single-day gain in a week on Thursday closing 31 paise higher at 58.47.The Indian unit has appreciated over 4 per cent since the beginning of this year from 61 levels.

On Friday, the unit opened marginally stronger at 58.45 per dollar on sustained capital inflows, which helped the BSE-benchmark Sensex close at 24,693 points, nearly 320 points higher (1.31 per cent) over the previous close.

This further strengthened the rupee to an 11-month high of 58.31 at the Interbank Foreign Exchange market.

However, the RBI is likely to have asked public sector banks to buy dollars to limit the gains in the Indian currency, which declined to 58.55 per dollar towards to late afternoon trading session of the day. Intraday, the rupee moved 24 paise in the 58.31- 58.55 per dollar range.

It sharply jumped from 60 levels early this month from the time the sentiments tilted towards a market favourable BJP-led NDA Government that took charge at the Centre on May 16. Post the national election results, the expectations from the new government’s plans to cut fiscal deficit and other likely policy initiatives further supported the rupee.

Call rates high, G-Sec yields drop sharply

The overnight call money rate (the rate at which banks borrow money from each other to overcome short-term liquidity mismatches) closed higher at 8.50 per cent from Thursday’s close of 7.10 per cent.

The yield on the benchmark 8.33 per cent, maturing in 2023, sharply dropped to 8.63 per cent from the previous close of 8.71 per cent on Thursday. The price of the security jumped to Rs 101.22 from Rs 100.76. Bond yields and prices move in opposite directions.

beena.parmar@thehindu.co.in

Published on May 23, 2014 10:18