Rupee falls as dollar gains ground

The rupee dropped for the second time this week as Japans escalating nuclear crisis prompted investors to favour the relative safety of the dollar over regional assets.

The rupee declined after the Dollar Index, which tracks the greenback against the currencies of six major US trading partners, climbed 0.5 per cent yesterday. The rupee dropped 0.2 per cent to 45.185 per dollar at the 5 pm close in Mumbai, according to data compiled by Bloomberg. The currency will rise to 45.17 by the end of June, according to the median estimate of 17 analysts in a Bloomberg News survey.

Bonds halt two-day gains
Eleven-year bonds halted two days of gains as the central bank raised borrowing costs for an eighth time in the past year.

The yield on the 8.08 per cent bond due August 2022, the most-traded government debt, was little changed at 8.08 per cent at the 5 pm close in Mumbai, according to the central banks trading system.

Call rates drop

The call rates dropped at 6.75 per cent, due to lack of demand from borrowing banks and the government bond prices also declined further on sustained selling pressure from banks and corporates. The call money rate finished higher at 6.75 per cent from overnight closing level of 7.25 per cent. It moved in a wide range of 7.90 per cent and 6.50 per cent.