R dips 33p on Fed remark, RBI auction

Jul 19 2013, 03:32 IST
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SummaryThe rupee extended losses for the second day, dropping 33 paise to 59.67 against dollar, after Fed’s comments strengthened the US currency and RBI drained only a fifth of its target in an auction to curb liquidity

The rupee extended losses for the second day, dropping 33 paise to 59.67 against dollar, after Fed’s comments strengthened the US currency and RBI drained only a fifth of its target in an auction to curb liquidity.

The rupee on Thursday opened weak at 59.61 a dollar from 59.34 previously at the Interbank Foreign Exchange Market and moved in a range of 59.49 and 59.79 before concluding at 59.67, a fall of 33 paise, or 0.56%.

The dollar index rose 0.16% against its major rivals as US Federal Reserve chairman Ben Bernanke on Wednesday reiterated changes to the central bank’s bond-buying programme would be data dependant. The $85-billion-a-month buying was instrumental in driving up liquidity in emerging market and an early withdrawal is feared to hit flows.

Yields ease

The government bond yields eased on Thursday after the central bank sold just about one-fifth of the bonds available via open market operations, reducing the strains on liquidity but raising the prospect of a hike in the cash reserve ratio.

The benchmark 10-year bond yield fell 6 basis points to 7.99% from its previous close, while the most-traded 8.33% 2026 bond yield dropped 8 bps to 8.10%.

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