Extending its south-ward journey, the rupee continued to weaken against the dollar since last five days on concern that the global recovery is threatened by the contagion effect of European debt crisis. The local unit ended at 45.48 per dollar compared with 45.31. It hit an intra-day low of 45.72, which is the weakest level since March 05. However, it erased its early losses in the late afternoon trade.
?Rupee recouped its losses tracking euro?s gains against the US dollar.? said Chandramgathan, a dealer from Federal Bank. Euro rose to 1.2587 against the dollar from 1.2798 level, its day?s low, after German Parliament approved Greece bail-out package.
Some one big corporate were seen selling dollar at 45.66 level to the tune of 60 million, which also helped rupee remove its losses, dealers said.
Moreover, rupee completed the worst week in more than a year as concerns over Europe?s debt crisis prompted global investors to move away from riskier assets and sought safety of the dollar.
The 50-share Sensex tumbled by 218 points to 16,769 on the Bombay Stock Exchange. It is the steepest weekly slide since October.
Government bonds erased most intraday gains to end off highs on Friday because traders sold noting the cutoff price at the 8.20%, 2022 gilt tender fell short of market expectations, dealers said.
The Reserve Bank of India set a cutoff of Rs 103.20 or 7.3908% yield for the 2022 bond, while most market participants had expected Rs 103.65 or 7.71%. The 8.20%, 2022 bond ended at Rs 102.70 or 7.8418% yield, but off the nine-month high of Rs 104.01 or 7.6738% yield hit intraday.
On Thursday, the bond had ended at Rs 102.55 or 7.8614%. The bond was the second-most traded today. Market participants who obtained the 2022 stock at a lower price through auctions sold the bond in the secondary market in late trade taking advantage of the bond?s big gains, dealers said.