Rupee reverses gain on dollar purchase

The currency up by nearly 0.6% on Tuesday on optimism that foreign funds would buy more Indian stocks

Rupee fell, reversing earlier gains, on speculation importers stepped up purchases of the dollar. The currency rose as much as 0.6 per cent on Tuesday on optimism that foreign funds would buy more Indian stocks. Provisional data from BSE Ltd show foreign investors bought a net Rs 1,12 crore ($188 million) of equities on June 28, ending 13 straight days of outflows, after the government agreed to raise natural- gas prices to encourage exploration. This is part of a policy overhaul to revive an economy that grew at a decade-low rate of five per cent in the year ended March 31. The rupee weakened 0.2 per cent to 59.67 a dollar in Mumbai.

Government bonds remain bearish
Government securities (G-sec) remained bearish on sustained selling pressure from banks and companies. The 8.20 per cent G-sec maturing in 2025 dropped to Rs 104.12 from Rs 104.26 on Monday, while its yield climbed to 7.67 per cent from 7.65 per cent.The 8.33 per cent G-sec maturing in 2026 fell to Rs 105.37 from Rs 105.49, while its yield inched-up to 7.67 per cent from 7.66 per cent.

Call rates held steady

Call money rates ended steady at the overnight call money market here on Tuesday as demand from borrowing banks matched supplies. The rates finished stable at seven per cent.

It moved in a range of 7.30 per cent and 6.90 per cent. The Reserve Bank of India under the Liquidity Adjustment Facility purchased securities worth Rs 74,780 crore in 23 bids at the one-day repo auction and a fixed rate of 7.25 per cent, while it sold securities worth Rs 2,290 crore in three bids at the one-day reverse repo auction at a fixed rate of 6.25 per cent.