The rupee touched a three-month high of 61.10 against the dollar on Thursday on heavy dollar inflows into the equity market as central bank data showed that the current account deficit (CAD) narrowed sharply. The Indian unit closed at 61.12 as against the previous close of 61.77.

Also, the BSE benchmark Sensex touching its life-time high of 21,513.87 points, up 237 points (1.11 per cent) over its previous close, helped boost the rupee.

Ashish Pathasarthy, Treasurer at HDFC Bank, said, “A lot of demand for dollar from oil companies seems to have been absorbed and large demand may have gone away.

Also, capital flows have been increasing in the past couple of months as sentiments towards emerging markets, especially towards India has improved.”

Call rates, bond yields soften

The inter-bank call money rate, the rate at which banks borrow money from each other, ended weaker at 7.05 per cent from its previous close of 8.50 per cent on Wednesday. The yield on the 10-year benchmark 8.83 per cent Government security, maturing in 2023, softened to 8.79 per cent from 8.84 per cent. The prices rose to close at ₹100.22 from the previous close of ₹99.90. Bond prices and yields move in opposite directions.

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