Rupee slips to 4-week low of 59.77

Our Bureau Updated - June 13, 2014 at 06:35 PM.

rupee

The rupee slipped 52 paise to a four-week low of 59.77 against the dollar after global oil prices surged to nine-month highs on rising concerns of violence in Iraq.

The domestic currency had closed at 59.25 on Thursday.

It opened 6 paise weaker at 59.31 per dollar on mild dollar demand from banks and importers. It further continued to weaken and dropped sharply to 59.79 per dollar as oil prices surged close to $115 per barrel on concerns of disruption of oil supplies due to violence in Iraq. Iraq is the second-largest oil and petroleum exporting countries.

On similar concerns, foreign investors pulled out capital from the domestic equity market which led the BSE-benchmark Sensex to plunge nearly 350 points (1.36 per cent) to 25,228 points. NSE-Nifty slipped 108 points (1.41 per cent) at 7,542 points.

The rupee moved almost 50 paise in the range of 59.31-59.70 per dollar during the day.

Call rates, Bond yields rise

With persistent high liquidity, the overnight call money rate (the rate at which banks borrow money from each other to overcome short-term liquidity mismatches) closed sharply higher at 8.75 per cent from 7.05 per cent. During the day, it moved in a wide range of 8.90 per cent and 7.80 per cent.

The 8.83 per cent benchmark bond maturing in 2023 declined to Rs 101.48 from Thursday’s close of Rs 101.80, while its yield hardened to 8.59 per cent from 8.54 per cent previously.

Bond yields and prices move in opposite direction.

Published on June 13, 2014 11:06