The rupee strengthened 25 paise to end at 60.93 against the dollar on Monday amid bouts of capital inflows and dollar demand ahead of the monetary policy by the central bank on Tuesday. The domestic currency had closed at 61.18 on Friday.
The unit opened at 60.96 per dollar and declined to 61.17 at the Interbank Foreign Exchange market due to increased dollar demand as the market remained cautious before the key interest rate decision by the RBI.
On Tuesday, the RBI is likely to maintain a status quo on repo rates due to still above comfort level inflation and may announce additional measures to support growth.
However, the rupee recovered to 60.88 as capital flows into the domestic equity markets and stronger Asian currencies boosted the rupee sentiments.
Call and Bonds
The inter-bank call money rate, the rate at which banks borrow short-term funds from one another to tide over liquidity mismatches, ended at 7 per cent on Monday. Intraday, call money market moved in the range of 6.80 to 8.20 per cent range.
The yield on the 10-year benchmark government bond 8.40 per cent maturing in 2024 softened a tad to 8.50 per cent from Friday’s close of 8.52 per cent. The price ended at Rs 99.33. Bond yields and prices move in opposite directions.