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The rupee gained on Wednesday after recovering from a near-record low hit earlier in the session, as policy makers pledged renewed efforts to defend the currency, while traders also cited central bank intervention. The rupee has slumped 1.7 per cent for the month, its third successive month of losses, even after the Reserve Bank of India (RBI) unveiled steps to defend the currency by draining cash, as the efficacy of the moves were put into question by doubts about the central bank's resolve.
The partially convertible rupee closed at 60.37 a dollar compared with 60.47/48 on Tuesday. It fell to 61.17 in session, within a whisker of its life low of 61.21 seen on July 8. The one-month offshore NDF rate was at 60.93 when local markets closed, a premium of about 53 points over onshore spot, sharply higher than the 15-20 points average. The rupee has been among the worst hit this year among emerging market currencies due to concerns about a current account deficit that hit a record high of 4.8 per cent of gross domestic product in the previous financial year.
Bonds turn bullish
Government security bonds (G-sec) turned bullish on fresh demand from banks and companies. The 8.20 per cent G-sec maturing in 2025 rose to Rs 97.10 from Rs 96.70, while its yield declined to 8.59 per cent from 8.64 per cent.
Call rates end higher
Call rates also finished higher at the overnight market due to good demand from borrowing banks. The rates finished higher at 9.75 per cent.
