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Business News/ Market / Stock-market-news/  Rupee closes weaker at 63.30 on dollar demand from importers, banks
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Rupee closes weaker at 63.30 on dollar demand from importers, banks

The local currency opened the session at 63.05 per dollar and touched a high of 62.99 in intra-day trade

The weakness in the rupee has been accelerated particularly in the second half of the year because of dollar strength overseas as the US currency has strengthened on expectations that the Federal Reserve will hike rates next year. Photo: Pradeep Gaur/Mint Premium
The weakness in the rupee has been accelerated particularly in the second half of the year because of dollar strength overseas as the US currency has strengthened on expectations that the Federal Reserve will hike rates next year. Photo: Pradeep Gaur/Mint

Mumbai: The rupee ended at 63.30 a dollar, down 0.30% from its previous close of 63.11 mainly due to dollar demand from importers. Banks also covered their dollar positions ahead of the weekend.

Volumes were thin as many dealers were away for their year-end holidays. Earlier the Indian currency had opened at 63.05 and later touched a high of 62.99 mainly tracking gains in the local stock market.

However dollar demand from importers pulled the rupee down.

India’s benchmark equity index, BSE Sensex, closed at 27,371.84 points, up 0.9%.

“There is genuine demand in the market but the currency has moved this much mainly because volumes are low as it is typical in the year end. Going forward I expect the rupee to remain under pressure and could weaken below 64 per dollar," said a dealer with a French bank.

Since the beginning of this year, the rupee has weakened 2.37% against the dollar even though foreign institutional investors have bought $16.45 billion during the period from local equity markets and $26.18 billion from the debt market.

The weakness in the rupee has been accelerated particularly in the second half of the year because of dollar strength overseas as the US currency has strengthened on expectations that the Federal Reserve will hike rates next year.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 89.39, up 0.17% from its previous close of 89.235.​

The yield on India’s 10-year benchmark bond ended at 7.96% compared with its Thursday’s close of 7.93%. Bond yields and prices move in opposite directions. It opened at 7.93% and touched a high and a low of 7.98% and 7.91%, respectively.

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Published: 19 Dec 2014, 09:32 AM IST
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