Rupee marginally stronger, Fed meet to give cue

The rupee strengthened on Wednesday due to dollar sales by companies and expectations that the US Federal Reserve might not slow down its third round of quantitative easing (QE3) soon. However, the rupee continues to be near its record low, hit last week due to outflows from domestic markets, adding to concerns that funding of the current account deficit will be difficult. The all-time record low in intra-day trade was Rs 58.98 against the dollar.

The rupee ended at Rs 58.72 on Wednesday, marginally better than yesterday's Rs 58.77, a record closing low.

Bonds rise on fresh buying
Government securities (G-Sec) rose on fresh demand from banks and companies.

The 8.33 per cent G-sec maturing in 2026 shot-up to Rs 107.30 from Rs 107.22 yesterday, while its yield held steady at 7.45 per cent. The 8.15 per cent G-sec maturing in 2022 climbed to Rs 104.39 from Rs 104.33, while its yield inched down to 7.47 per cent from 7.48 per cent. The 8.20 per cent G-sec maturing in 2025 gained to Rs 105.98 from Rs 105.92, while its yield held stable at 7.45 per cent.

Call rates end lower
Call money rates ended lower due to lack of demand from borrowing banks.

The rate finished lower at 7.25 per cent from 7.28 per cent yesterday. It moved in a range of 7.35 per cent and 7.20 per cent.