The rupee ended 26 paise weaker at 61.50 against the dollar on Thursday due to mild dollar demand from banks and importers and a stronger American currency.
The domestic unit shed 14 paise to open at 61.38 against the dollar against the previous close of 61.24 due to increased dollar demand and profit booking by investors. A stronger dollar against other currencies also weighed on the rupee sentiments.
The dollar hovered near a two-week high on Thursday as some investors cut negative bets on the currency after the US Federal Reserve kept its stimulus programme, according to agencies.
It hovered in the 61.54-61.29 range during the day. However, persistent capital inflows into the equity market limited the rupee's fall.
BSE-benchmark Sensex closed at another record high at 21,164.5 points, up 130 points (0.62 per cent).
According to a report by Care Ratings, with the global conditions based on Fed action being deferred for the time being, the global influence on the exchange rate would tend to be limited. Hence, FII funds could come in bigger numbers though presently it is positive in equities and negative in debt. If the USA recovery is still some distance away, then there is reason to believe that support will come from here.
“Also with the trade deficit coming under control, and severe curbs being placed on gold, the rupee may be expected to remain stable in the 60-62 per dollar bracket,” the report said.
Call rates and G-Secs
Yield on the 10-year benchmark government bond 7.16 per cent 2023 hardened to 8.62 per cent from Wednesday’s close of 8.57 per cent. Bond prices ended weaker at Rs 90.59 from Rs 90.90.
The overnight call money rate, rate at which banks borrow from each other for their short-term funding requirements, closed flat from the previous close of 8.70 per cent.