 "Cautious rupee weakens ahead of Fed policy")
The rupee gave up most gains on Wednesday as investors covered their short dollar positions ahead of the outcome of the US Federal Reserve's two-day policy meeting, while weaker local shares also hurt. The Fed is expected to cut monthly debt purchases by another $10 billion, after cutting it by the same amount in December.
Continued reduction in US stimulus could curb the waves of cheap money that had benefited emerging markets such as India in recent years. Uncertainty about Fed tapering, and concerns about an economic slowdown in China, had sparked a rout in emerging markets, although risk assets rebounded after Turkey sharply raised interest rates.
The partially convertible rupee closed at 62.41/42 a dollar, compared with Tuesday's 62.51/52 after moving in a range of 62.10 to 62.52 during the session.
Government bonds' prices continued to rule weak on sustained selling from banks and companies. The 8.83 per cent G-sec maturing in 2023 fell to Rs 100.34 from Rs 100.50 previously, while its yield moved-up to 8.77 per cent from 8.75 per cent.
Call rates recover
Call rates recovered on fresh demand from borrowing banks. The overnight rates ended higher at eight per cent from 7.50 per cent on Tuesday.
Continued reduction in US stimulus could curb the waves of cheap money that had benefited emerging markets such as India in recent years. Uncertainty about Fed tapering, and concerns about an economic slowdown in China, had sparked a rout in emerging markets, although risk assets rebounded after Turkey sharply raised interest rates.
The partially convertible rupee closed at 62.41/42 a dollar, compared with Tuesday's 62.51/52 after moving in a range of 62.10 to 62.52 during the session.
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Bonds drop further
Government bonds' prices continued to rule weak on sustained selling from banks and companies. The 8.83 per cent G-sec maturing in 2023 fell to Rs 100.34 from Rs 100.50 previously, while its yield moved-up to 8.77 per cent from 8.75 per cent.
Call rates recover
Call rates recovered on fresh demand from borrowing banks. The overnight rates ended higher at eight per cent from 7.50 per cent on Tuesday.