Re weakens to 1-month low on deficit concern

The rupee fell to the weakest level in more than a month on concern a record current account deficit will pressure the currency.

The rupee declined 0.3 per cent to 55.23 a dollar here, according to data compiled by Bloomberg. It earlier touched 55.34 a dollar, the weakest level since November 29. One-month implied volatility, a gauge of expected moves in exchange rates used to price options, fell 10 basis points, or 0.10 percentage point, to 9.70 per cent.

The widest measure of trade was $22.3 billion in the quarter ended September 30, according to central bank data published on December 31. The BSE India Sensitive Index of shares fell for the first time in five days.

Bonds remain firm
Government securities (G-sec) rose further on sustained buying support from banks and companies.

The 8.15 per cent G-sec maturing in 2022 shot up to Rs 101.63 from last Friday’s level of Rs 101.43, while its yield moved down to 7.90 per cent from 7.93 per cent. The 8.20 per cent G-sec maturing in 2025 also hardened to Rs 101.83 from Rs 101.60, while its yield eased to 7.97 per cent from 7.99 per cent.

Call rates recover
Call money rates recovered at the overnight market here on Monday due to fresh demand from borrowing banks. The rate finished higher at 8.05 per cent from last weekend’s close of 7.80 per cent. It moved in a range of 8.15 per cent and 7.85 per cent.