Rupee ends weaker after hitting 1-week high

Written by Reuters | Updated: Jul 25 2014, 06:20am hrs
The rupee ended weaker on Thursday, retreating from a more than one-week high hit earlier in the session on the back of month-end dollar demand from importers and possible intervention by the central bank.

The rupee had initially gained on sustained foreign fund inflows into the stock and debt markets and after the government allowed foreign institutional investors to hold more government debt while reducing the portion available to long-term investors.

But that was not enough to sustain the gains given heavy dollar buying by state-run banks to meet month-end import payment demands of clients, with some traders citing potential dollar buying by the Reserve Bank of India. The rupee closed at 60.10 per dollar, compared with 60.09 on Wednesday. The unit hit 59.98 during the session, its strongest since July 14.

Bonds rise

Government bonds rose on Thursday to a three-week high after foreign institutional investors were allowed to buy more sovereign debt, but broader gains were capped amid caution ahead of the weekly debt auction. The benchmark 10-year 2023 bond yield ended 1 bp lower at 8.65% compared with the previous close after falling to its lowest since July 4.