The rupee rebounded to under 55 per dollar mark for the first time in over two weeks with falling international crude oil prices easing the demand for dollars from oil importers.
The local unit gained 42 paise against the dollar over Wednesday’s close. The rupee closed at 54.94 per dollar. It had closed at 55.36 on Wednesday.
Brent crude was trading at $101.38 at 6 pm IST. In the last month, brent crude prices have eased by about 10 per cent.
“Falling oil prices has awarded some amount of stability to the rupee,” Mr. Bitupan Majumdar, Head FX Derivatives at JRG Securities said.
The rupee continues to be fundamentally weaker with high current account deficit, fiscal deficit and policy paralysis, he said.
Investor sentiment was lifted when the Prime Minister, Dr Manmohan Singh, set a infrastructure target for the current fiscal. The rupee also gained after cues from the Reserve Bank that it might cut policy rates. The mid-term policy review is slated on June 18.
Call rates unchanged, G-Secs
The call rate, the rate at which banks borrow from each other to meet their short-term capital requirements, remained unchanged at close at 8.10 per cent. It opened at 8.15 per cent.
The 10-year benchmark government paper, maturing in 2021, opened at Rs 102.51.It closed at Rs. 102.84 at a yield of 8.3466 per cent. Bond rates and yield move in opposite direction.