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Paring initial gains, the rupee ended weaker at 54.82 against the dollar due to heavy demand for the greenback from importers and banks. The Indian unit had closed at 54.70 on Monday.
On Tuesday, after opening almost flat at 54.72, the rupee strengthened to 54.53 as the wholesale price index inflation reading for April came in lower at 4.89 per cent, boosting the sentiments in favour of the domestic unit.
The latest headline inflation reading favourably dipped below the Reserve Bank of India’s medium term comfort level of 5 per cent for the first time in more than three years. This increased hope among market players that further monetary easing by the RBI will positively impact the rupee.
“However, at the 54.55 level, importers started buying dollars which weighed on the rupee,” said a senior dealer with a public sector bank.
The BSE benchmark Sensex rose by a marginal 31 points (up 0.16 per cent) to close at 19,722 points.
Call flat, bonds slump
The interbank call money rates ended lower at 7.25 per cent from Monday’s close at 7.30 per cent. It moved in a narrow range of 7.25 to 7.35 per cent.
The 8.15 per cent government security, which matures in 2022, ended sharply higher at Rs 104.40 from its previous close of Rs 103.65. Yields dropped to 7.47 per cent from 7.58 per cent. Yields and bond prices move in the opposite direction.
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