Rupee falls on dollar sale speculation

MARKET ROUND-UP

The rupee weakened, halting a two-day gain, on speculation that importers took advantage of the biggest advance in more than a month to buy dollars at a more favourable exchange rate. The rupee also dropped after China reported a trade deficit of $31.5 billion for February, the most in at least 22 years. The currency pared losses as a government report showed India’s industrial output grew 6.8 per cent in January from a year earlier, the fastest in seven months.

“Investors will opt to keep positions light ahead of the data and policy decisions this week,” said Vikas Babu, a currency trader at Andhra Bank in Mumbai.

The rupee declined 0.3 per cent to 49.98 per dollar in Mumbai, according to data compiled by Bloomberg. It fell to 50.01 earlier. The currency strengthened 0.9 per cent on March 9, the biggest gain since February 3.

Bonds end mixed
Government securities (G-Secs) continued to rule mixed on alternate bouts of buying and selling. The 8.79 per cent G-Sec maturing in 2021 declined further to Rs 103.22 from Rs 103.32, while its yield moved up to 8.30 per cent from 8.28 per cent. The 9.15 per cent G-sec maturing in 2024 fell to Rs 106.24 from Rs 106.39, while its yield looked up to 8.34 per cent from 8.32 per cent. The 8.19 per cent G-sec maturing in 2020 and the 7.83 per cent G-sec maturing in 2018 also quoted lower at Rs 99.17 and Rs 97.45, respectively.

Call rate recovers
The call rate recovered at the overnight call money market on Monday on lack of liquidity in the banking system and fresh demand from borrowing banks. The rate closed at 8.85 per cent, compared with Friday’s close of 8.30 per cent.