The rupee dropped on speculation oil importers stepped up dollar purchases after the currency’s appreciation to an almost two-week high made the greenback cheaper. “We are seeing oil importers bidding for dollars before the testimony by Bernanke,” said Vikas Babu, a trader at state-run Andhra Bank in Mumbai. “The rupee is likely to stay in a relatively tight range on Wednesday, with dollar-buying capping strength.”
The rupee declined 0.7 per cent to 55.5 per dollar, the biggest drop since July 9, according to data compiled by Bloomberg.
Bonds recover on good demand
Government securities (G-sec) recovered on good buying support from banks and companies. The 8.15 per cent G-sec maturing in 2022 climbed to Rs 100.55 from Rs 100.39 yesterday, while its yield edged down 8.07 per cent from 8.09 per cent. The 9.15 per cent G-sec maturing in 2024 rose to Rs 106.56 from 106.43, while its yield eased to 8.29 per cent from 8.3 per cent. The 8.19 per cent G-sec maturing in 2020 also surged to Rs 100.35 from 100.2, while its yield moved down to 8.13 per cent from 8.15 per cent.
Call rates end stable
Call money rates closed stable as demand from borrowing banks matched supplies. The overnight call money rate finished steady at 8.1 per cent, it moved in a range of 8.1 per cent and 7.9 per cent.