Re recovers 35 paise on govt action hope

The rupee on Thursday rose 35 paise to close at 56.80 against the dollar, amid hopes that Prime Minister Manmohan Singh, who himself has taken over the finance portfolio, will initiate steps to prop up the economy and halt the currency’s slide.

The rupee resumed higher at the Interbank Foreign Exchange (Forex) market but fell to a intra-day low of 57.10. It soon staged a smart recovery on dollar selling by exporters and some banks on expectations of steps by the prime minister, amid top officials reviewing the economic situation.

The rupee closed at 56.80, showing a rise 35 paise or 0.61 per cent, its biggest percentage gain in two weeks. FIIs sold stocks worth Rs 1,113 crore on Thursday while domestic institutions bought Rs 772.37 crore shares as per provisional data from stock exchanges.

“The rupee appreciated as there was not much of demand for dollars coupled with selling of greenback from foreign banks. The PM’s statement regarding revival of animal spirit in economy sustained the sentiment,” N S Venkatesh, head of treasury, IDBI Bank said.

Bonds end mixed
Government securities (G-sec) end mixed on alternate bouts of buying and selling. The 9.15 per cent G-sec maturing in 2024 fell to Rs 105.58 from yesterday’s level of Rs 105.65, while its yield moved up to 8.41 per cent from 8.4 per cent.

The 8.79 per cent G-sec maturing in 2021 declined to Rs 102.71 from Rs 102.77, while its yield held steady at 8.36 per cent. But, the 7.83 per cent G-sec maturing in 2018 moved up to Rs 98.23 from Rs 98.22, while its yield held stable at 8.22 per cent. The 8.97 per cent G-Sec maturing in 2030 rose to Rs 103.76 from Rs 103.65, while its yield edged down to 8.56 per cent from 8.57 per cent.

Call rates remain stable
Call rates remained stable here on Thursday as demand from borrowing banks matched supplies. The rate ended stable at eight per cent from the previous closing level. It moved in a range of 8.15 per cent and 7.19 per cent.