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The rupee posted a massive 60 paise gain to end at 62.50 to a dollar, ending a three-day falling streak, against the previous close of 63.10 after the Reserve Bank of India unexpectedly raised interest rates to bring down consumer inflation. The RBI hiked its repo rate, the interest rate at which it lends short-term funds to banks, by 0.25 per cent to 8 per cent. According to a dealer with a public sector bank, the repo rate hike by RBI was a measure to keep the rupee volatility under check as higher rates can make the currency more attractive for foreign investors. The inter-bank call money rate, the rate at which banks borrow short-term money from each other, ended higher at 8.30 per cent from the previous close of 7.75 per cent. Yield on the benchmark 8.83 per cent Government bond maturing in 2023, softened to 8.74 per cent from the previous close of 8.76 per cent. Prices rose to ₹100.5 from ₹100.4.
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