Re weakens 12 paise on dollar demand

The rupee weakened by 12 paise to end at 55.82 against the American currency on fresh dollar demand from banks and importers, amid a rise in May inflation sapping investors’ hopes of a rate cut by the Reserve Bank of India (RBI) next week. The rupee resumed lower at 55.75 per dollar as against yesterday’s closing level of 55.68 at the Interbank Foreign Exchange (Forex) market. With inflation data for May coming at 7.5 per cent, the rupee in line with the stock market lost further ground to touch 55.89, before finishing a tad higher at 55.82.

Bond declines on selling pressure
Government bonds declined on selling pressure from banks and companies. The 9.15 per cent government security maturing in 2024 dropped to Rs 106 from 106.35 yesterday, while its yield climbed to 8.36 per cent from 8.32 per cent. The 8.79 per cent government security maturing in 2021 fell to Rs 102.97 from 103.19, while its yield rose 8.33 per cent from 8.29 per cent. The 8.15 per cent government security maturing in 2022 declined to Rs 100.73 from Rs 100.76, while its yield held steady at 8.04 per cent.

Call rate ends lower
Call rates also ended lower at the overnight call money market here on Thursday, due to lack of demand from borrowing banks amidst ample liquidity in the banking system.

The rate finished lower at 7.95 per cent from yesterday’s closing level of 8.05 per cent. It hovered in a range of 8.1 per cent and 7.95 per cent.