The rupee fell by 37 paise to close at one-week low of 55.84 against the US currency following fresh dollar demand from importers and banks in the wake of US Fed announcing no new steps to tide over economic crisis.
Dealers said there was sudden spurt of demand for the US currency in the fag-end of trade as investors speculated that there would no special measure by ECB either. At Interbank Foreign Exchange (Forex) market, rupee opened weak at 55.75 from yesterday’s close of 55.47. The dollar gained strength after the US Fed on Wednesday did not announce any new measures to boost its sagging economy, traders said.
However, the rupee quickly recovered to the day’s high of 55.63 on back of dollar sales by exporters on hopes that ECB will enact special measures at the end of today’s meeting.
Bonds rise
Bonds rose for a second day on speculation that banks will refrain from paring holdings, even after the central bank cut their debt-investment requirements, as a slowing economy saps demand for loans.
The yield on the 8.15% securities due June 2022 fell one basis point, or 0.01 percentage point, to 8.22% in Mumbai, according to RBI trading system. Bank lending increased at an average annual pace of 17.3% this year, compared with 20.4% in 2011, RBI data show.
