Rupee closes lower at 61.55 vs dollar…

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The rupee weakened for the fourth trading session Tuesday to end 5 paise lower at 61.55 against the dollar. The dollar strengthened and banks bought dollars to limit sharp depreciation in the Indian unit.

The unit had closed at 61.50 , It opened a tad weaker at 61.60 against the dollar due to slower inflow of funds from foreign investors. It gained to 61.52 as capital inflows continued into the domestic equity markets.

However, the American dollar climbed to a 7-year high against the yen after reports of a likely to delay in the planned sales tax increase by Japan. In addition, banks bought dollars likely on behalf of the RBI, in order to limit sharp fall in the rupee. This pulled the rupee to a day’s low of 61.64.

Later, stable capital flows helped the rupee recover to 61.55 at day’s close. On Wednesday, the bank union strike may impact volumes of the trading session.

The inter-bank call money rate, the rate at which banks borrow short-term funds from one another, ended higher at 8.90 per cent from Monday’s close of 7.80 per cent.

Yield on the 10-year benchmark 8.40 per cent government security, maturing in 2024, hardened a tad to 8.18 per cent from the previous close of 8.17 per cent. The price of the bond fell to Rs 101.39 from Rs 101.45.

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