12-Aug-2013
Mumbai: The rupee gave up all its early gains to end weaker against the dollar on Monday as banks covered their positions on the US currency, disappointed by the lack of details in the finance minister’s speech to Parliament on Monday.
The rupee ended at 61.28 per dollar, down 0.68% from the previous close of 60.86. It had earlier opened at 60.51 per dollar and touched a high of 60.49 and a low of 61.30.
Finance minister P. Chidambaram told Parliament that India would seek to reduce imports of gold, silver and “non-essential” imports, while also curbing demand for oil.
The finance minister also proposed to raise funds abroad, allowing public sector financial firms to sell debt to finance long-term infrastructure projects, raising money via deposits targeted at Indians living overseas, and liberalising guidelines for external commercial borrowings.
Chidambaram also vowed to contain the current account deficit at $70 billion for the fiscal year ending in March, or an estimated 3.7% of the gross domestic product (GDP), down from a record 4.8% in the previous fiscal year.
However, dealers bought back dollars sold earlier in the day because the announcement didn’t contain more specific measures.
“He told us what we already knew. The announcements did not say how they are going to act and by when can we expect some action. It was done in a noisy parliament and the market will react positively only when we see some details,” said a dealer with a UK-based bank.
Since January this year, the rupee has weakened 10.25% and has lost the most among Asian currencies after the yen.
The dollar index, which measures the US currency’s strength against major currencies, ended at 81.402, up 0.34% from the previous close of 81.126.
India’s benchmark Sensex ended at 18,946.98 points, up 0.84% from the previous close.
The 10-year bond ended at 8.282%, up 1.73% or 0.141 basis points (bps) from the previous close of 8.141%. It opened at 8.229% and touched a high of 8.288% and a low of 8.187%.
The call money rate ended at 10.25%, up 2.50% or 0.25 bps from the previous close of 10%. It opened at 10.25 and touched a high of 10.50% and a low of 10.10%.
Source:-www.livemint.com
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