The rupee rose on Thursday, the first time in nine days, after the central bank took steps to boost the supply of dollars in the financial system, helping stem the decline in Asia’s worst-performing currency this year.
The rupee rebounded from a record low on November 22 after the Reserve Bank of India (RBI) yesterday loosened rules for companies to borrow abroad and sell foreign currencies through swaps, and raised the interest rate on bank deposits for Indians living overseas. The currency has dropped 14.1 per cent this year on concern Europe’s debt crisis will slow the global economy.
“What we are seeing on Thursday is positive sentiment after the Reserve Bank measures,” said Ashtosh Raina, head of foreign- exchange trading at HDFC Bank Ltd in Mumbai.
The rupee advanced 0.6 per cent to 52.0738 per dollar in Mumbai, according to data compiled by Bloomberg. It touched an all-time low of 52.7300 this week.
Bonds improve
Government bonds improved further on sustained buying by banks and companies. The 8.79 per cent government security maturing in 2021 hardened to Rs 99.97 from Rs 99.8525 yesterday, while its yield declined further to 8.79 per cent from 8.81 per cent. The 9.15 per cent government security maturing in 2024 rose to Rs 101.5125 from Rs 101.3650, while its yield dropped to 8.95 per cent from 8.97 per cent previously.
Call rate recovers
The call rate rate on Thursday moved in a range of 8.75 per cent and 8.62 per cent before settling at 8.70 per cent.
