The rupee completed its first monthly gain since July, after the central bank increased interest rates and Europe stepped up efforts to contain a debt crisis that drove funds from emerging-market assets.
The rupee appreciated 0.6 per cent this month and 0.1 per cent on Monday to 48.6950 per dollar in Mumbai, according to data compiled by Bloomberg. It strengthened 2.6 per cent last week after touching 50.3237 on October 21, the weakest level since April 2009.
Offshore forwards indicate the rupee would trade at 49.45 to the dollar in three months, compared with expectations for a rate of 49.44 on October 28. Forwards are agreements to buy or sell assets at a set price and date.
BONDS DECLINE
Government bonds declined further on sustained selling pressure from banks and companies. The 7.80 per cent government security maturing in 2021 slipped further to Rs 93.20 from 93.40 previously, while its yield rose to 8.88 per cent from 8.84 per cent. The 8.13 per cent government security maturing in 2022 eased to Rs 94.57 from Rs 94.59, while its yield held steady at 8.92 per cent. The 7.83 per cent government security maturing in 2018 fell to Rs 94.95 from Rs 95.07.
CALL RATE RECOVERS
The call rate recovered at the overnight call money market here on Monday due to fresh buying support from borrowing banks amid scarcity of liquidity in the banking system. The overnight call money rate finished higher at 8.60 per cent from last weekend’s level of 8.40 per cent.