The rupee ended at a three-week high of 54.35 against the dollar on the back of passage of the Bill to avert the US fiscal cliff crisis in US Parliament.
The Indian unit opened higher at 54.42 from Tuesday’s close of 54.69 as the decision on the US fiscal crisis pumped in capital inflows into the Asian markets boosting the rupee.
However, it fell to 54.54 in the first session due to dollar demand from oil importers. The rupee later reversed the weakness to touch an intra-day high of 54.26 per dollar.
Analysts expect the rupee to strengthen further given the positive domestic and global developments and an anticipation of an interest rate cut from the central bank on January 29.
Further, the current account deficit (CAD) of 5.4 per cent of GDP for the July-September quarter of 2012 and dollar demand from importers could exert limit the gains exerting a downward pressure on the rupee.
Call Rates and G-Secs
Amid high liquidity, the inter-bank call money market ended flat from Tuesday’s close of 8 per cent. During the day, the rates moved in the range of 7.90 to 8.20 per cent.
The 8.15 per cent government security (G-Sec), which matures in 2022, also ended flat from its previous close of Rs 101.01 on Tuesday, while yields remained unchanged at 7.99 per cent.