Re soars to 3-month high of 53.31 vs $

The rupee on Wednesday shot up by a staggering 47 paise to close at nearly a three-and-a-half- month high of 53.31 on sustained dollar selling amid continued capital inflows, after the Reserve Bank of India cut lending rate to boost growth.

Forex dealers said weakening of the US currency against the euro and a recovery in local equities also favoured the rupee sentiment. The currency started the day at a firm note at 53.55 from yesterday’s close of 53.77 against the dollar at the Interbank Foreign Exchange market. Previously, It had ended at 52.87 on October 17, 2012.

Bonds decline
Government bonds declined on selling pressure from banks and companies. The 8.15 per cent government security maturing in 2022 slipped to Rs 101.68 from Rs 101.97 yesterday, while its yield moved up at 7.89 per cent from 7.85 per cent. The 8.33 per cent government security maturing in 2026 declined to Rs 102.70 from Rs 103.00, while its yield rose to eight per cent from 7.96 per cent.

Call rates end lower
Overnight money rates ended lower at the market here on Wednesday on lack of demand from borrowing banks. The rate finished lower at 7.85 per cent from eight per cent previously. It moved in a range of 7.85 per cent and 7.60 per cent.