The rupee strengthened to end higher at 54.77 against the dollar on the back of capital flows into the domestic equity markets and a weaker dollar.
The Indian unit opened higher at 54.87 from Thursday’s close of 54.93 against the dollar due to positive domestic equity markets and mild capital inflows on the back of reports that the petroleum ministry has proposed a gradual hike in diesel prices by Rs 10 in 10 months.
Further, the uncertainty over the US fiscal cliff decision and slipping its deadline weakened the dollar against other currencies.
In addition, the Reserve Bank of India infused Rs 7,899 crore through open market operations limiting the weakness in the rupee.
However, month-end dollar demand may continue to put pressure on the rupee.
Call Rates and G-Secs
Amid high liquidity, the overnight call money rates ended lower at 7.90 per cent from its previous close of 8.05 per cent. The call rates had opened higher at 8.15 per cent and moved in the range of 7.90 to 8.40 per cent.
The 10-year benchmark 8.15 per cent government security, which matures in 2022, ended marginally higher at Rs 100.28 (yield: 8.10 per cent) from Thursday’s close of Rs 100.25 (yield: 8.11 per cent).