The rupee ended 45 paise stronger at 59.69 against the dollar on Wednesday after the Reserve Bank of India took steps to curb volatility in the currency arising out of speculative trading.
On Tuesday, the rupee had ended 47 paise higher at 60.14 on the back of actions taken by the RBI and SEBI to curb speculative trades in the currency derivatives market.
According to a Treasury official with a public sector bank, the RBI’s directives to oil companies to restrict their dollar purchases to only a single public sector bank in a day helped moderate the volatility in the rupee.
The domestic unit opened stronger at 59.99 against the dollar on Wednesday and rose to 59.95 in early trades at the Interbank Foreign Exchange market.
However, it declined to a low of 60.21 on mild dollar demand in the first half of the trading session after which it quickly recovered.
The rupee had closed at a life-time low of 60.76 on June 26. Further, it had touched an intra-day low of 61.19 on Monday.
According to experts, the rupee is likely to appreciate to 57-58 levels in about two months.
However, the dollar’s strength against other overseas currencies is likely to limit the appreciation of the Indian currency in the shorter term.
Call slips, bonds rise
The interbank call money rates ended weaker at 6.80 per cent from their previous close of 7.10 per cent.
The benchmark 7.16 per cent government security, which matures in 2023, ended higher at Rs 97.50 from the previous close of Rs 97.32.
Yields softened to 7.52 per cent from 7.55 per cent.