The rupee on Thursday erased initial gains and slipped 33 paise, logging its biggest daily drop in over two weeks, to end at 62.44 versus the dollar in line with weakness in domestic stocks and sustained demand of the dominant global currency from oil importers.
The rupee commenced higher at 62.05 a dollar from the last close of 62.10 - a three-week high. It improved further to a high of 62.03 due to higher opening in domestic equities and initial dollar selling by exporters.
Later, it dipped on sluggish stock markets to a low of 62.46, before concluding at 62.44, logging a fall of 33 paise or 0.52 per cent. In last straight two days, it had gained 33 paise or 0.53 per cent. Thursday's drop is the biggest since the 44-paise fall on January 27.
Government bonds gave up gains to end lower on Thursday as buoyed sentiment from easing inflation was offset by concerns about how much the government will need to borrow in the next financial year.
Investors chose to cheer the easing headline number, sending yields down to 8.76 per cent in early trades. However, traders continued to remain jittery ahead of the borrowing numbers for the financial year beginning April, which Finance Minister P Chidambaram will unveil on Monday.
The 8.12 per cent government security maturing in 2020 declined to Rs 95.2450 from Rs 95.55, while its yield moved-up to 9.07 per cent from 9.00 per cent. The 8.28 per cent government security maturing in 2027 also dipped to Rs 93.15 from Rs 93.62, while its yield gained to 9.17 per cent from 9.11 per cent. The 7.28 per cent government security maturing in 2019, the 8.24 per cent government security maturing in 2027 and the 7.16 per cent government security maturing in 2023, were also quoted down at Rs 93.24, Rs 92.82 and Rs 87.85, respectively.
The 8.28 per cent government security maturing in 2027 shot-up to Rs 93.62 from Rs 93.3975, while its yield slipped to 9.11 per cent from 9.14 per cent. The 8.12 per cent government security maturing in 2020 also moved-up to Rs 95.55 from Rs 95.45, while its yield edged-down to 9.00 per cent from 9.02 per cent.
The overnight call money rate ended higher at 9.15 per cent from 8.050 last Friday, it moved in a range of 9.25 per cent and 8.40 per cent.
The 7.28 per cent government security maturing in 2019, the 8.24 per cent government security maturing in 2027 and the 8.32 per cent government security maturing in 2032, were also quoted up at Rs 93.5150, Rs 93.3350 and Rs 92.85, respectively.
