The rupee shed 10 paise to open at 61.39 against the previous close of 61.29 on the back of weakness in domestic equity market and high dollar demand from importers.
The rupee journeyed southwards after Finance Minister, P. Chidambaram, told Parliament on Monday that he will keep the current account deficit at 3.7 per cent of the gross domestic product in the current fiscal but did not outline specific measures.
The Finance Minister’s statement lacked the finer details of how he would keep the current account deficit (CAD) at $70 billion (3.7 per cent of GDP) at a time when imports are increasing and dollars are finding their way into the US markets.
India’s trade deficit, the difference between imports and exports, for July at $12.27 billion stayed almost the same as it had in June.
Dealers and traders will believe only concrete action of the government, said a top official of a public sector bank, who did not wish to be named.
The Reserve Bank’s liquidity squeezing measures also has not had much impact on shoring up the currency, the official added.
Call rates up; bond yields harden
The interbank call money rates, the rates at which banks borrow from each other to meet their short term requirements, opened higher at 10.35 per cent from its previous close of 10.25 per cent
The benchmark 7.16 per cent government security, which matures in 2023, opened flat from its previous close of Rs 92.47, while yields on the security remained at 8.29 per cent from the previous close.
Source Article from http://www.thehindubusinessline.com/markets/forex/rupee-opens-down-at-6139/article5018310.ece
