Rupee dips on inflation woes

The rupee weakened for a second day, approaching a five-month low, on speculation investors will refrain from buying the nation’s assets after inflation held above nine per cent for the eighth month.

Wholesale prices rose 9.22 per cent in July from a year earlier, government data showed yesterday. Foreign investors sold $694 million more of Indian shares than they bought last week. The rupee declined 0.1 per cent to 45.4150 per dollar at the close in Mumbai, according to data compiled by Bloomberg. The currency reached 45.4625 on August 12, the weakest level since March 17.

BONDS DECLINE
Government bonds declined on fresh selling pressure from banks and companies. The 7.80 per cent government security maturing in 2021 dropped to Rs 96.57 from Rs 96.7750 yesterday, while its yield moved up to 8.32 per cent from 8.29 per cent. The 8.13 per cent government security maturing in 2022 slipped to Rs 97.90 from Rs 98.05, while its yield edged up to 8.42 per cent from 8.40 per cent.

CALL RATE DECLINES
The call rate ended lower at 8.00 per cent at the overnight call money market on Wednesday due to lack of demand from borrowing banks.