The rupee was trading weak by 38 paise at 61.14 per dollar at 1.39 p.m. local time on good demand for greenback from banks and importers despite weakness of dollar in the overseas market.

The domestic unit resumed weak at 60.88 per dollar against the last closing level of 60.76 per dollar at the Interbank Foreign Exchange (Forex) market.

It hovered in a range of 60.87-61.19 per dollar during the afternoon trade.

Analysts believe that the Indian currency is likely to trade in the range of 60-61 over the next two weeks.

FII inflows

A slowdown in capital inflows into the Indian markets has also been cited as the reason for the rupee’s fall.

Abhishek Goenka, Founder & CEO, India Forex Advisors, said: “The sluggish pace of FII flows is seen eating away the gains in the domestic currency. The pace of FII flows in the Indian markets has dramatically reduced. From the humungous inflows of $5.17 billion in the previous month, the Indian markets have been able to get only $1.31 billion this month till now with the month-end inching nearer.”

Call rates, G-Secs

The overnight call money rate (the rate at which banks borrow money from each other to overcome short-term liquidity mismatches) opened higher at 8.90 per cent against the previous close of 8 per cent.

The yield on 10-year benchmark 8.83 per cent bond, maturing in 2023, opened higher at 8.86 per cent against the previous close of 8.85 per cent. Prices fell to Rs. 99.86 from Rs. 99.83. Bond yields and prices move in the opposite direction.

Source:- thehindubusinessline.com