Rupee trading weak at 63.44 on dollar demand

The rupee opened 9 paise weak at 63.35 per dollar after ending at a two-month low of 63.26 against the American currency in the previous session due to persistent dollar demand from importers and a stronger dollar overseas.

At 9.44 a.m., the domestic unit was trading weak at 63.44 per dollar.

Persistent dollar demand from oil importers and banks due to stronger dollar weighed on the rupee sentiment, a forex dealer said.

Last week, Economic Affairs Secretary, Arvind Mayaram, had said that the state-run oil companies were sourcing 30-40 per cent of the dollar requirement through the open market and not via the special window provided by RBI.

QE tapering

According to Upasna Bhardwaj, Economist, ING Vysya Bank, even as CAD concerns have abated and significantly lower capital flows are needed to finance the same, fears of early QE tapering by the Fed and withdrawal of temporary measures by the Reserve Bank of India in the subsequent weeks are expected to bring the rupee further under pressure.

“We expect the rupee to trade in the 62-64 range in the near term, with a further shift towards 63-66 per dollar in the next quarter,” she said
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Call rates, G-secs

The overnight call money rates, the rate at which banks borrow short-term funds from each other, opened flat from the previous close of 8.75 per cent.

Yield on the 10-year benchmark 7.16 per cent 2023 government bond remained flat at 8.95 per cent from its previous close. Bond prices remained at Rs 88.66.