The rupee was trading a tad weak at 60.12 against the dollar at the Interbank Foreign Exchange market due to mild dollar demand from banks and importers.
The domestic unit jumped by 29 paise to 59.82 against the dollar in the opening trade amid IMF’s forecast of improved growth prospects for India.
The rupee hovered in the range of 59.82-60.15 against the dollar during the afternoon trade.
Supported by slightly stronger global growth, improving export competitiveness and implementation of recently approved investment projects, India’s growth is expected to recover from 4.4 per cent in 2013 to 5.4 per cent in 2014, the IMF had said yesterday.
The domestic unit had closed flat at 60.11 per dollar on Monday. The currency market remained closed on Tuesday due to a bank holiday on account of Ram Navami.
A higher opening in the domestic equity market and strengthening of other Asian currencies against the dollar overseas also supported the rupee in early trade, forex dealers said.
The RBI is actively absorbing flows to slow the rupee’s rise since September 2013, whilst simultaneously boosting the foreign reserves stock to ward off bouts of volatility, said Radhika Rao, Economist at DBS Group.
The overnight call money rate, interest rate at which banks borrow money from each other to overcome short-term liquidity mismatches, was trading weak at 8.2 per cent from its previous close of 9.1 per cent on Monday.
Yield on 10-year benchmark 8.83 per cent government bond, maturing in 2023, softened a tad to 9.09 per cent from Monday’s close of 9.1 per cent. Prices of the security were trading slightly higher at Rs 98.29 from Rs 98.27. Bond prices and yields move in the opposite direction.
Source:- thehindubusinessline.com
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