Wednesday, 9 October 2013

Rupee pares early gains; down at 62.24/dollar


The rupee gained 60 paise to 61.20 per dollar in the opening trade against the previous close of 61.80 on the back of Reserve Bank of India’s measures to improve liquidity in the banking system.

However, it was trading weak at 62.24 per dollar at 10.00 a.m.

Indranil Sen Gupta, India Economist, DSP Merrill Lynch, said in a research report: “We were always sceptical of the July tightening to defend the rupee as the FII equity portfolio, of $220 billion, which responds to growth, is far larger than the $28 billion FII bond portfolio, which may respond to rate hikes. Not surprisingly, the long-awaited FCNR (B) deposit-cum-swap facility ($5.7 billion so far) to raise FX reserves has been far more effective in stabilising the INR.”

Call rates, G-Secs

The 7.16 per cent government security, which matures in 2023, opened higher at Rs 91.57 from the previous close of Rs 91.33. The yields softened sharply to 8.45 per cent from 8.49 per cent. Bond yields and prices move in opposite directions.

The inter-bank call money rate, the rate at which banks borrow from each other to meet their short-term fund requirements, opened higher at 9.10 per cent against the previous close of 8.95 per cent.

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