Rupee falls 26 paise to week's low of 61.89; bonds turn weak

The rupee on Tuesday declined 26 paise to end the the day at one-week low of 61.89 against the dollar, completing losses for three days in a row. Sustained demand for the US currency from importers amid a firm dollar overseas weighed heavily on the rupee, a forex dealer said. At the Interbank Foreign Exchange market, the domestic currency touched a high of 61.45 in intra-day trade on signs of sustained capital inflows.

Government bonds prices declined on fresh bout of selling from banks and corporates and the overnight call money rates also finished lower following lack of demand from borrowing banks amid comfortable liquidity in the banking system.

The 8.83 per cent government security maturing in 2023 dropped to Rs 101.7975 from Rs 102.04 on Monday, while its yield moved up to 8.55 per cent from 8.52 per cent. The 8.28 per cent government security maturing in 2027 fell to Rs 95.0950 from Rs 95.45, while yield rose to 8.91 per cent from 8.86 per cent. The 8.12 per cent government security maturing in 2020 also slipped to Rs 97.1375 from Rs 97.28, while its yield gained to 8.68 per cent from 8.65 per cent.

The overnight call money rate ended lower at 8.20 per cent from 8.55 per cent previously. It moved in a range of 8.40 per cent and 7.70 per cent.