The rupee ended lower on Wednesday, the first trading session of 2014, with traders focused on key macroeconomic data, ahead of the Reserve Bank of India (RBI)'s rate meeting later this month. Volumes were thin as most global markets were shut for new year holiday. Emerging from a year that saw the rupee plumbing to a series of lows, traders are awaiting allocations from foreign investors into local markets, which form a key support for the currency.
"The rupee is likely to consolidate at the current levels, keeping an eye on the data in US and political developments in India," said Vikas Babu Chittiprolu, a senior currency dealer at Andhra Bank. The partially convertible rupee closed at 61.90/91 a dollar compared with 61.80/81 on Tuesday, in a range-bound trading session. It ended 2013 down 11 per cent, a third successive annual loss.
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Call money rates ended lower at the overnight market due to lack of demand from borrowing banks, amid ample liquidity in the system.
The rates finished lower at 7.75 per cent from Tuesday's 8.85 per cent.