The rupee strengthened on Wednesday as domestic shares edged higher to post their first daily gain so far this year, although broader sentiment remains cautious ahead of key inflation data next week. Traders said custodian banks were also spotted selling dollars, helping offset greenback demand from oil firms - the largest buyers of dollars in the domestic currency market. Trading is likely to remain range-bound, until India posts wholesale and consumer inflation next week, which will help determine whether the Reserve Bank of India raises interest rates or leaves them unchanged after tightening monetary policy by 50 basis points over September and October.
The partially convertible rupee closed at 62.07/08 a dollar, compared with 62.30/31 on Tuesday.
Bonds drop further
Government securities (G-secs) dropped further on sustained selling pressure from banks and companies. The 8.83 per cent G-sec maturing in 2023 fell to Rs 100.16 from Rs 100.24 previously, while its yield inched-up to 8.80 per cent from 8.79 per cent.
Call rates remain stable
Call money rates remained stable at the overnight market as demand from borrowing banks matched the supply. The rates ended steady at 8.75 per cent. It moved in a range of 8.80 per cent and 7.60 per cent.
