Rupee drops on concern economy weakening

The rupee fell the most in a week on concern an economic slowdown and inflation near seven per cent will deter investors from buying local assets.

The currency declined 0.3 per cent to 55.38 per dollar as of 9:53 am, the biggest drop since September 5, according to data compiled by Bloomberg. One-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 8.50 per cent, the lowest level since September 2011.

Bonds recover on good demand
Government securities (G-sec) recovered on good buying support from banks and companies. The 8.33 per cent G-sec maturing in 2026 climbed to Rs 100.21 from Rs 99.89 yesterday, while its yield declined 8.30 per cent from 8.34 per cent.

Call rate finish lower
Call rates declined at the overnight money market here on Thursday due to lack of demand from borrowing banks. The rate ended lower at eight per cent., It moved in a range of 8.10 per cent and 7.90 per cent.