The rupee began the week on a lower note declining 38 paise to end at 62.55 against the dollar on Monday as strong US jobs data strengthened the American currency.

The Indian currency had closed at 62.17 against the dollar on Thursday. Friday, the market remained closed on account of Holi festival.

 On Monday, it opened sharply weaker by nearly 50 paise at 62.65 on increased expectation of a rate hike by US Federal Reserve following stronger-than-expected jobs data.

 The global stocks tumbled and domestic equity indices Sensex and the Nifty also fell over 2 per cent on Monday, their biggest single-day drop in two months.

 The 30-share BSE index Sensex plunged 604 points to close at 28,845 and the 50-share NSE index Nifty dropped 181 points to 8,756.75.

 The heavy outflows further weakened the rupee to 62.73 at the Interbank Foreign Exchange market. However, likely intervention by banks buying dollars on behalf of RBI supported the rupee to recover to 62.53 per dollar near the closing session.

  Call and Bonds weaken

 

The interbank call money rate, rate at which banks lend to each other to overcome overnight liquidity mismatches, ended higher at 7.75 per cent from Thursday’s close of 7.50 per cent. Intra-day, call money market moved in the range of 6.50 per cent and 7.80 per cent.

 

The 10-year benchmark 8.40 per cent government bond, maturing in 2024, weakened to Rs 104.33 from the previous close of Rs 104.56. The yield on the bond hardened to 7.74 per cent from 7.70 per cent. Bond prices and yields move in opposite directions.

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