Re gains on optimism inflows will increase

The rupee advanced on optimism that policy changes by the government this month will spur inflows.

The rupee rose 0.2 per cent to 53.38 per dollar in Mumbai, according to data compiled by Bloomberg.

The currency has gained 4.2 per cent this month, the best performer in Asia. One-month implied volatility, a measure of exchange-rate swings used to price options, rose 55 basis points, or 0.55 percentage point, to 11.30 per cent.

Bonds react downwards
Government bonds reacted downwards on selling pressure from banks and companies.

The 8.15 per cent government security maturing in 2022 dropped to Rs 99.86 from 99.95 previously, while its yield inched up by 8.17 per cent from 8.16 per cent.

Call rates end stable
Call money rates held steady as demand from borrowing banks matched supplies. It ended steady at 8.05 per cent. It moved in a range of 8.10 per cent and 7.90 per cent.