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The rupee weakened on Thursday after minutes from the Federal Reserve's October meeting showed policymakers were considering cutting its stimulus programme in coming months. Despite central bank's intervention in the market, though not in heavy doses, the rupee ended weak. Domestic equity market indices traded in the red which dampened sentiments for the rupee further. Besides that there was dollar buying by Oil Marketing Companies (OMCs).
The rupee ended at Rs 62.94 compared with previous close of Rs 62.58 per dollar. The rupee had opened at Rs 62.91 and during intra-day trades it touched a high of Rs 62.79 and a low of Rs 62.98 per dollar.
“There is dollar demand from OMCs which is keeping the rupee under pressure. Besides that there is also dollar demand from corporates. The key reason for the weakness in rupee was due to the release of October's Federal Open Market Committee (FOMC) minutes,” said a currency dealer with a state-run bank.
In the current fiscal the rupee has weakened by nearly 16%. Since the start of this month the rupee has weakened by 2.34%.
“Rupee weakness was due to minutes of FOMC meeting. The broad range for the rupee till end-December may be Rs 61.50 to Rs 63.50 per dollar,” said S Srinivasaraghavan, head of treasury at Dhanlaxmi Bank.
Tracking the weakness in the rupee the yield on the 10-year benchmark government bond 7.16% 2023 ended at 9.08% compared with previous close of 9.04%.
