Rupee rises the most in 2 weeks

The rupee strengthened the most in two weeks on speculation that the central bank would raise interest rates tomorrow for a seventh time this year, boosting the yield advantage on local assets.

The rupee strengthened 0.4 per cent to 49.8313 per dollar in Mumbai, according to data compiled by Bloomberg, the biggest gain since October 12. It touched 50.3237 on October 21, the lowest level since April 2009.

BOND YIELDS STEADY
Ten-year bond yields held at a three-year high on speculation that the central bank would raise interest rates tomorrow “High headline and core inflation, stubborn commodity prices, the weaker rupee and looming fiscal slippage will likely influence RBI to hike” borrowing costs, analysts at Barclays Capital, including Mumbai-based Siddhartha Sanyal, wrote in a report published on Monday.

CALL RATE DROPS
The call rate dropped finished lower at 8.40 per cent from last Friday's close of 8.75 per cent. It moved in a range of 8.45 per cent and 8.15 per cent.