The rupee strengthened on Monday to its highest level in nearly a week, boosted by Reserve Bank of India (RBI) chief's comment on reluctance to "overtighten" monetary policy after leaving interest rates unchanged in a surprise move last week. RBI Governor Raghuram Rajan said the central bank had tilted towards keeping rates on hold even before November consumer and wholesale price inflation data were released.
"The governor's comments helped the rupee a bit. At least the market now thinks the central bank will consider growth as well when framing monetary policy," said Hari Chandramgethen, head of foreign exchange trading at South Indian Bank.
The partially convertible rupee closed at 61.95/96 a dollar compared with 62.04/05 on Friday. It rose to as high as 61.83 after Rajan's comments, its highest level since Wednesday.
Bonds remain bearish
Government securities (G-secs) remained bearish on sustained selling pressure from banks and companies. The 8.83 per cent G-sec maturing in 2023 fell to Rs 100.07 from Rs 100.20 previously, while its yield moved-up to 8.82 per cent from 8.80 per cent.
Call rates end steady
Call money rates ended stable at the overnight market as demand from borrowing banks matched the supply. The rates ended stable at 8.75 per cent.
