The rupee is expected to weaken this week on the back of month-end dollar demand by importers, while government bond yields are expected to rise due to tight liquidity. The rupee ended at 59.35 a dollar on Friday, compared with Thursday's close of 59.68. "Though the Reserve Bank of India (RBI) has taken several steps to arrest the rupee's fall, month-end dollar demand will keep the rupee under pressure," said a currency dealer with a private bank. Friday did see some of the month-end dollar demand but the rupee ended strong because state-run banks were selling dollars on behalf of the central bank. In the recent past, RBI has been intervening a lot in the forex market, due to which its foreign currency assets have been depleting.
As on July 12, its foreign currency assets fell to $252,136 million; it was $261,513 mn on April 5.
According to dealers, the rupee will trade in the range of Rs 59-60 this week.
Government bond yields fell on Friday after Prime Minister Manmohan Singh said the measures to drain liquidity would be temporary and on reports that a sovereign bond issuance was being considered. The yield on the 10-year benchmark government bond 7.16 per cent 2023 ended at 7.94 per cent, compared with the previous close of 7.99 per cent.
"The yield on the 10-year benchmark is expected to trade in the range of 7.85-8 per cent," said S Srinivasaraghavan, executive vice-president and head-treasury of Dhanlaxmi Bank.
According to government bond dealers, the yield might again touch eight per cent this week, as there is tight liquidity.
As on July 12, its foreign currency assets fell to $252,136 million; it was $261,513 mn on April 5.
According to dealers, the rupee will trade in the range of Rs 59-60 this week.
Government bond yields fell on Friday after Prime Minister Manmohan Singh said the measures to drain liquidity would be temporary and on reports that a sovereign bond issuance was being considered. The yield on the 10-year benchmark government bond 7.16 per cent 2023 ended at 7.94 per cent, compared with the previous close of 7.99 per cent.
"The yield on the 10-year benchmark is expected to trade in the range of 7.85-8 per cent," said S Srinivasaraghavan, executive vice-president and head-treasury of Dhanlaxmi Bank.
According to government bond dealers, the yield might again touch eight per cent this week, as there is tight liquidity.