Rupee weaker on US Fed tapering concerns

The rupee weakened on Thursday after minutes from the US Federal Reserve's October meeting showed policymakers were considering cutting its stimulus programme in the coming months.

Despite the Reserve Bank of India (RBI)'s light intervention in the market, the currency ended lower. Domestic equity market indices traded in the red and dollar buying by oil marketing companies (OMCs) further dampened the currency sentiment.

The rupee ended at 62.94, compared with Wednesday's close of 62.58 a dollar. It had opened at 62.91 and touched a high of 62.79 and a low of 62.98 during intra-day trade.

The rupee has weakened about 16 per cent this financial year. Since the start of this month, it has fallen 2.3 per cent.

"The broad range till December-end may be between 61.50 and 63.50 a dollar," said S Srinivasaraghavan, head of treasury at Dhanlaxmi Bank.

Tracking the rupee's weakness, the yield on the 10-year benchmark government bond 7.16 per cent ended at 9.08 per cent, compared with the previous close of 9.04 per cent.

Call rates finish lower
Call money rates also finished lower at the overnight market due to lack of demand from borrowing banks. The rates ended lower at 8.70 per cent from 8.73 per cent on Wednesday. It moved in a range of 8.80 per cent and 7.90 per cent.