The rupee wiped off its early losses and was trading up by 6 paise at 63.66 against the dollar at 2.29 p.m. local time on mild dollar selling by banks and exporters.
The domestic unit shed 16 paise to 63.88 per dollar in the opening trade against the previous close of 63.72 on heavy dollar demand from importers.
“There is lot of oil demand in the market and hence companies are persistently buying dollars,” said a Treasury head of a public sector bank.
About 30-40 per cent of the dollar requirement by importers is coming through the open market and not via the special window provided by RBI, the Finance Ministry had said last week.
In addition, if the US starts withdrawing its fiscal stimulus in January as against the market expectation of April, it will weigh on the rupee sentiment, the bank official said.
The Index of Industrial Production released yesterday for the month of September grew at below-market-estimates of 2 per cent versus 0.43 per cent in August. The Consumer Price Index further disappointed the markets as it came in at double digits at 10.09 per cent compared with 9.84 per cent in September.
According to Abhishek Goenka, Founder and Chief Executive Officer of India Forex Advisors, the poor CPI and IIP numbers are seen putting pressure on the rupee.
Call rates, G-secs
The overnight call money rate, the rate at which banks borrow short-term funds from each other, opened higher at 8.8 per cent from the previous close of 8.7 per cent.
Yield on the 10-year benchmark 7.16 per cent 2023 government bond hardened to 9.12 per cent from the previous close of 8.05 per cent. Bond prices were down to Rs 87.7 from Rs 88.08.
