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Rupee gains for a second day

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Agencies Mumbai

The rupee strengthened for a second day after US Federal Reserve Chairman Ben S Bernanke said the US central bank was prepared to buy more government bonds, fanning concern the supply of dollars would increase.

The Dollar Index, which tracks the greenback against those of six trading partners, dropped 0.3 per cent, declining for a third day after Moody’s Investors Service put the US debt rating on review for a possible downgrade for the first time since 1995.

The rupee advanced 0.1 per cent to 44.4975 per dollar at the close in Mumbai, according to data compiled by Bloomberg, following a 0.4 per cent gain yesterday. The wholesale price index rose 9.44 per cent in June from a year earlier, compared with 9.06 per cent in May.

 

Bonds firm up
Government bond prices firmed up on fresh buying support from banks and companies. The 7.80 per cent government security maturing in 2021 shot up to Rs 97.07 from Rs 96.66 yesterday, while its yield declined to 8.24 per cent from 8.30 per cent. The 8.13 per cent government security maturing in 2022 hardened to Rs 98.40 from Rs 98.03, while its yield fell to 8.35 per cent from 8.40 per cent.

Call rate recovers
The call rate improved further at the overnight call money market here today due to sustained demand from borrowing banks. The overnight call money rate closed higher at 7.55 per cent.

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First Published: Jul 15 2011 | 12:47 AM IST

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