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The rupee continued to decline on Friday ending the week to a three-and-a-half month low of 63.56 against the dollar due to month-end dollar demand and capital outflows from the domestic equity markets.
The closing is its lowest level since January 6. The Indian unit had lost 50 paise on Thursday to close at 63.32.
The unit opened a tad stronger at 63.26 and further rose to 63.21 in the early trades. However, it slipped to 63.64 against the greenback as heavy outflows from the equity markets weighed on the rupee.
BSE-benchmark Sensex ended weaker by 297 points (1.07 per cent) to close at 27,437.94.
Month-end dollar demand also weakened the rupee, said a forex dealer.
“We expect INR (Indian Rupee) to depreciate to 64.50 levels in September 2015 before stabilising around 63.00 levels by March 2016,” said Yes Bank in a report.
Bond yields up and Call rates fall
The yield on India’s 10-year benchmark bond hardened to 7.78 per cent from the previous close of 7.76 per cent on Friday. The price of the bond weakened to Rs103.96 from Rs 104.17. Bond yields and prices move in opposite directions.
Amid high liquidity movement, the interbank call money rate, rate at which banks lend each other to meet overnight liquidity mismatches, closed lower at 6.90 per cent from Thursday’s close of 8.50 per cent.
Intra-day, it moved in a wide range between 6.50 per cent and 7.95 per cent.
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