Re rout continues, falls 50 paise against $

Falling for the fourth day in a row, the rupee lost a hefty 50 paise to close at 55.92 on persistent dollar demand, especially from companies and oil importers.

The local currency touched a one-week low of 56.07 intra-day but there was no sign of RBI intervention to shore it up.

With the US dollar strengthening against rivals, including the euro, in the foreign market following disappointing US jobs growth figures, the rupee was under pressure throughout the session as foreign banks and importers bought the US currency.

After opening sharply lower at 55.90 against last weekend’s level of 55.42 at the Interbank Foreign Exchange (Forex) market, the rupee slumped to the day’s low level soon. The currency had last fallen below the 56-level against the dollar on June 29.

With FIIs pumping Rs 250 crore in stocks on Monday according to provisional BSE data, it helped the rupee recover a little and strengthen to 55.81. But weakness emerged again at closing, as the rupee ended at 55.92. In the last four days, it has tumbled 154 paise or 2.8 per cent.

“The weakness was purely due to the external situation, especially the slide in the euro against the dollar. There was also demand from oil companies which put pressure,” said N S Venkatesh, treasury head, IDBI Bank.

Bonds firm up on good demand
Government securities (G-sec) firmed up on good buying support from banks and companies.

The 9.15 per cent G-sec maturing in 2024 climbed to Rs 106.07 from Rs 105.86 previously, while its yield declined 8.35 per cent from 8.38 per cent. The 8.19 per cent G-sec maturing in 2020 rose to Rs 100 from 99.93, while its yield moved down to 8.19 per cent from 8.2 per cent.

Call rates drop
The call money rate ended lower at the overnight market here on Monday, due to lack of demand from borrowing banks amidst ample liquidity in the system. The rate finished lower at 8.1 per cent from last Friday’s close of 8.4 per cent.