Rupee ends weak due to dollar demand

The rupee posted a marginal fall on Wednesday as continued dollar demand from importers eroded early gains from the government's decision to relax the foreign direct investment rules in various sectors. The currency ended at 59.35 a dollar, compared with the previous close of 59.32. It had opened at 59.06 and during intra-day touched a high of 59.05 and a low of 59.58 a dollar.

"There was month-end dollar demand due to which the rupee came under pressure wiping out initial gains. The government needs to take concrete steps to boost inflow of dollars to strengthen the rupee," said a currency dealer with a state-run bank. The rupee's weakness, in spite of strong steps taken by the Reserve Bank of India (RBI) on Monday, shows the demand for dollars remains strong, overriding RBI's attempt to stamp on speculation.

Bonds, call rates
Government securities (G-sec) closed mixed, with an upper bias on bouts of buying and selling from banks and comapnies. The 8.33 per cent G-sec maturing in 2026 declined to Rs 101.18 from Rs 101.25 on Tuesday, while its yield inched up to 8.18 per cent from 8.17 per cent.

Call money rates ended higher at the overnight market here on Wednesday, on fresh demands from borrowing banks. The rates finished higher at 7.50 per cent from Tuesday's close of 6.30 per cent.