The rupee closed weaker at 54.93, as oil-related dollar demand weighed on the Indian unit.
The local unit opened higher at 54.75 (previous close, 54.84) on the back of strong capital inflows and sales of the American currency by exporters and banks.
“The rupee traded in a thin range for the second straight session in the absence of domestic and international news. Despite the weakness in the dollar index and a recovery in the euro, the rupee was not seen gaining. Technically, 54.80 is a good support for USD-INR pair,” said Abhishek Goenka, Founder and CEO, India Forex Advisors.
In addition, a positive opening in the domestic equity market and a stronger euro also supported the rupee initially. However, by the end of day’s trade, losses in the domestic equity market also weighed on the Indian unit.
Intraday, the rupee moved between a high and low of 54.73 and 54.98, respectively. The rupee will continue to be volatile in the short run till a solution to the impending “fiscal cliff” in the US is found.
Call rates, G-Secs
The overnight call money rate closed lower at 8.05 per cent from Wednesday’s close of 8.15 per cent. The 10-year benchmark 8.15 per cent Government security, which matures in 2022, ended almost unchanged at Rs 100.25 from its previous close of Rs 100.24 on Wednesday. Yields remained constant at 8.11 per cent