Rupee ends flat as $ demand from importers weighs
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The rupee on Wednesday ended flat at 52.87 against the US dollar after surrendering initial gains against the US currency.
At the Interbank Foreign Exchange (Forex) market, the local unit commenced higher at 52.75 a dollar from overnight close of 52.87. It immediately touched a high of 52.65 in line with a smart rise in domestic stock market. Continued dollar selling by exporters at initial stages and subdued dollar overseas also helped the rupee rally in the morning session.
However, late dollar demand from importers, mainly oil refiners, and weakness in local stocks weighed on the rupee. It fell back to a low of 52.98 before ending stable at its Tuesday's closing level of 52.87. Fresh capital outflows also put pressure on the rupee in the later part of the day, said forex dealers. "The rupee was seen trading in a range of 30 paise for the day. We observed that the rupee was not getting strong in spite of a sharp recovery in the euro and weakening trend in the US dollar. We expect rupee to trade within the range of 52.00-54.00 levels for next couple of months," said Abhishek Goenka of India Forex Advisors.
Bond yields end flat, await RBI review
Bond yields ended flat on Wednesday, as falls in global crude prices eased some of the recent inflationary worries, although no big debt price movements are expected ahead of the central bank's policy review towards the end of the month.
The benchmark 10-year bond yield closed flat at 8.15% after moving in a narrow 8.15 to 8.16% band during the session. It RBI opt to keep rates on hold, it would fly against a trend towards easing in the region meant to support economic growth.
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