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The rupee rose on Wednesday but gave up most of the gains on the back of strong dollar demand from state-run banks, intended to be channelled to pay the government's defence payment requirements and concerns about tighter monetary policy in China. Dollar demand from a large petrochemical company also kept the rupee's gains in check, after the partially convertible currency had tracked gains in other emerging market currencies in the morning, after worse-than-expected US monthly jobs data.
A less healthy employment report is expected to force the US Federal Reserve to delay any tapering of its monetary stimulus until next year. The rupee closed at 61.59/60 a dollar, compared to 61.65/66 on Tuesday. It traded in a 61.05-61.67 band in the session.
Bonds turn bearish
Government securities (G-secs) turned bearish on selling pressure from banks and companies. The 7.16 per cent government security (G-sec)maturing in 2023 declined to Rs 90.53 from Rs 90.68 previously, while its yield gained to 8.63 per cent from 8.61 per cent.
Call rates end lower
Call money rates ended lower at the overnight market due to lack of demand from borrowing banks. The rates ended lower at 8.98 per cent from nine per cent on Tuesday. It moved in a range of 9.05 per cent and 8.90 per cent.
