Rupee pares early lows on dollar selling

The rupee on Monday recovered most of its early losses, but still ended three paise down at 51.14/15 against the US currency due to late dollar selling by exporters.

The rupee resumed sharply lower at 51.37/38 a dollar at the Interbank Foreign Exchange (Forex) market from last close of 51.11/12. It immediately touched a low of 51.45. Dealers attributed early steep weakness in the rupee to sluggish equities amid heavy dollar demand from importers.

“The dollar index, which was trading at day’s high, pared some of its gains towards mid-session, which aided the rupee to recover some of its lost grounds,” Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said.

Bonds improve, call rate recovers
The government securities (G-Sec) improved further on sustained demand from banks and corporates. The 9.15 per cent (G-Sec) maturing in 2024 hardened to Rs 103.4850 from Rs 102.98 last Wednesday, while its yield dipped further to 8.69 per cent from 8.75 per cent. Call rates reversed its downtrend and closed higher on lack of supply in the banking system.

The Overnight call rate rebounded to settle at 8.8 per cent from 7.5 per cent previously. It moved in a range of 9.05 per cent and 8.80 per cent.