The rupee lost five paise to close at 44.89/90 against the US currency on late dollar demand amid substantial capital outflows in last few days.
?Rupee traded range bound to slightly weak, mainly taking cues from local equities which traded weak. Dollar demand from oil importers also helped dollar to gain against rupee. Euro also weakened against the greenback,? Alpari Forex (India) CEO Pramit Brahmbhatt said.
?Looking at strong dollar one can expect rupee to trade near 45.00 in coming days and the trading range for the USD/INR will be 44.70 to 45.20 on Thursday,? he added.
Sustained capital outflows also put pressure on the rupee. Foreign Institutional Investors withdrew $627.98 million in straight eight sessions since June 10. Some weakness in local equities too impacted negatively. The benchmark Sensex, after moving erratically, closed lower by a mere 9.67 points, or 0.06%.
The dollar index was up by 0.05% against a basket of currencies while the New York crude oil was trading near $93.5 a barrel in European market on Wednesday. India Forex Advisors CEO Abhishek Goenka said that major Asian currencies traded stronger throughout the day where as Singapore dollar and Thai baht traded weaker.
Indian government bond yields and swap rates rose on Wednesday, tracking higher global crude oil prices, ahead of lined-up supplies, but lingering concerns over Greece?s debt woes limited a sharp rise in yields.
The 10-year Indian benchmark bond yield closed at 8.25%, 3 basis points above Tuesday?s close, after trading in a range of 8.24% to 8.27%.
Total volumes on the central bank?s electronic trading platform were a low R7,055 crore ($1.6 billion) compared with R9,000-10,000 crore traded on a normal day.
India will sell R12,000 crore of bonds on Friday, including R3,000 crore each of 7.59% 2016 bonds and 8.28% of 2032 bonds and R6,000 crore of 8.08% 2022 bonds. Firmer oil prices also weighed on sentiment, traders said.
The benchmark five-year interest rate swap closed up 6 basis points at 7.71%, while the one-year swap rate ended at 7.93%, higher than 7.91% at previous close.