 "Rupee appreciates in afternoon trades; Short-term rates ease")
The rupee appreciated in afternoon trades due to dollar sale by custodian banks. There is dollar demand from private sector oil marketing companies which may put pressure later during the day, said currency dealers.
At 12:40 pm the rupee was trading at Rs 61.68 compared with previous close of Rs 61.80 per dollar.
Yesterday the Reserve Bank of India (RBI) had cut the Marginal Standing Facility rate by 50 basis points to 9%. This was the second consecutive cut by the central bank. Earlier on September 20, the rate was reduced by 75 basis points to 9.50%.
Due to cut in the MSF rate, short-term rates eased. The call money rate was quoting at 9.05% compared with weighted average rate of 9.48% yesterday. While the Collateralized Borrowing and Lending Obligation (CBLO) rate was quoting at 9.02% compared with weighted average rate of 9.50% yesterday.