Rupee drops most in a week

The rupee fell the most in a week after Germany dismissed speculation that Europe’s debt crisis would be solved as early as this weekend, sapping demand for emerging-market assets.

The rupee declined 0.7 per cent to 49.2950 per dollar in Mumbai, according to data compiled by Bloomberg, the most since October 11. It touched 49.3575 earlier, the weakest since October 12. Offshore forwards indicate the rupee would trade at 50.03 to the dollar in three months, compared with expectations for a rate of 49.52 yesterday.

BONDS END MIXED
Government bonds closed mixed on alternate bouts of buying and selling.

The 7.80 per cent government security maturing in 2021, moved up further to Rs 93.98 from Rs 93.94 previously, while its yield held steady at 8.75 per cent. The 8.26 per cent government security maturing in 2027, hardened to Rs 94.40 from Rs 94.20, while its yield eased to 8.93 per cent from 8.95 per cent. The 8.30 per cent government security maturing in 2040, rose to Rs 93.25 from Rs 93.10, while its yield softened to 8.96 per cent from 8.97 per cent. However, the 8.08 per cent government security maturing in 2022 declined to Rs 95.13 from 95.20, while its yield inched up to 8.78 per cent from 8.77 per cent.

CALL RATE STABLE
The call rate remained steady on the overnight call money market on Tuesday on alternate demand and supply. The overnight call money moved in a range of 8.35 per cent and 7.85 per cent before concluding stable at its yesterday’s closing level of 8.30 per cent.