The rupee declined 1.2 per cent to 51.4 per dollar in Mumbai, the biggest drop since December 12. The currency fell the most in more than three months on speculation importers stepped up dollar purchases to settle bills ahead of the March 31 financial-year end.
The currency headed for its first monthly decline in 2012 after data showed the UK economy shrank more than previously estimated last quarter, fueling concern the global recovery is faltering. Orders placed with US factories for durable goods rose 2.2 per cent in February, less than the three per cent gain forecast in a Bloomberg survey of economists.
“There is consistent demand for dollars, which should ease once April begins,” said Naveen Raghuvanshi, a trader at Development Credit Bank in Mumbai. “There are also negatives emerging from the global economy which may pressure inflows, and we will have to wait and see how these pan out.” The currency fell 4.6 per cent this month, paring its quarterly advance to 3.3 per cent.
Bonds end mixed, call rates rise further
The government securities (G-Sec) closed mixed on alternate bouts of buying and selling from banks and corporates. The 8.8 per cent (G-Sec) maturing in 2021 recovered to Rs 101.2 from Rs 101.0825, while, its yield held steady at 8.6 per cent yesterday. The 7.8 per cent maturing in 2018 also shot up to 96.4 from Rs 96.3 previously, while its yield declined to 8.6 per cent from 8.6 per cent.
The overnight call money market shot up further on Thursday on lack of money surplus amid sustained demand from borrowing banks to meet their year-end needs. The call money rate moved in a range of 9.25 per cent and 1.00 per cent before settling at 10.00 per cent over its last close of 9.40 per cent.
However, the 9.15 per cent (G-Sec) maturing in 2024 fell further to Rs 103.62 from Rs 104.08, while its yield jumped to 8.67 per cent from 8.61 per cent. The 8.97 per cent (G-Sec) maturing in 2030 dropped to Rs 101.5025 from Rs 102.00, while its yield improved to 8.80 per cent from 8.75 per cent. The 7.99 per cent (G-Sec) maturing in 2017 and 7.80 per cent maturing in 2021 were held stable at Rs 97.25 and Rs 94.45, respectively.
One-month implied volatility, a measure of exchange-rate swings used to price options, was little changed at 9.80 percent, according to data compiled by Bloomberg.
Three-month offshore non-deliverable forward contracts for the rupee traded at 52.40 a dollar, compared with 52.08 yesterday. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.
