The rupee is expected to strengthen this week in the absence of month-end dollar demand from importers. The Indian currency ended at Rs 56.51, almost near a one-year low, compared with the previous close of Rs 56.38 a dollar. The rupee had reached Rs 56.81 a dollar on June 28, 2012. During the day it touched a high of Rs 56.40 and a low of Rs 56.76.
According to currency dealers, during the last few hours of trading on Friday, state-run banks bought dollar so as to meet the demand of oil importers, due to which sentiments were dampened. Since the start of this financial year, the rupee has weakened by 4.13 per cent.
But currency traders are of the view the rupee will strengthen. "The rupee may strengthen from here, as month-end dollar demand is over and exporters will be selling dollars at these levels," said a currency dealer with a public sector bank.
Government bond yields are expected to fall this week due to hopes of further repo rate cuts in the mid-quarter review of the monetary policy on June 17.
The yield on the 8.15 per cent 2022 government bond ended unchanged at 7.44 per cent on Friday compared with previous close.
The yield on the 7.16 per cent 2023 government bond ended at 7.24 per cent on Friday compared with previous close of 7.19 per cent.
According to government bond dealers, the yield on the 8.15 per cent 2022 bond is expected to trade in the range of 7.40-7.48 per cent this week while the yield on the 7.16 per cent 2023 government bond is expected to trade in the range of 7.15-7.25 per cent.
