Rupee slips 35 paise against dollar

Our Bureau Updated - March 26, 2015 at 06:36 PM.

rupee

The Indian rupee plunged against the dollar to close at 62.68 due to heavy capital outflows and a spike in oil prices after Saudi Arabia announced war on Yemen. It had closed at 62.33 on Wednesday.

On Wednesday night, Saudi Arabia began military operations in Yemen, launching airstrikes in coordination with a coalition of 10 nations. This raised oil security fears of a surge in oil demand leading to sharp rise in crude prices by over 5 per cent.

Gold prices also moved higher and the dollar weakened against the euro and the yen. Asian currencies also remained weak.

The domestic unit opened at 62.55 in a knee-jerk reaction to the airstrike news and gained marginally to 62.50 in the early trades.

However, higher oil prices, capital outflows amid tensions in the Middle East weighed on the rupee which fell to 62.77 against the dollar.

BSE-benchmark Sensex saw major selling by both domestic and foreign investors and weakened by 654.25 points (2.33 per cent) to close at 27,457.58.

Bonds yields and Call Rates rise

The yield on 10-year benchmark 8.40 per cent Government security maturing in 2024, hardened for the second continuous session to 7.79 per cent from Wednesday’s close of 7.77 per cent. During the day, the yields moved in the range of 7.76 to 7.80 per cent.

The price of the security declined to Rs 103.93 from Rs 104.10. The prices and yields of bonds move in opposite direction.

The interbank call money rate, rate at which banks lend to each other to overcome overnight liquidity mismatches, increased to 7.30 per cent from the previous close of 6.90 per cent. Intra-day, it moved between 6.50 to 7.55 per cent range.

Published on March 26, 2015 12:41