The rupee was trading strong by 32 paise at 61.59 against the dollar at 4.19 p.m. local time.
The domestic unit gained 36 paise to 61.55 per dollar in the opening trade against the previous close of 61.91 due to fresh selling of dollar by banks and exporters, triggered by weakness in the greenback overseas.
However, the industrial output data, which was released late Friday, contracted to -2.1 per cent signalling a steep decline in consumption activity. This is likely to weigh on the rupee sentiment during the day.
Monetary policy review
The negative data on industrial output will force the Reserve Bank of India to maintain its hawkish stance on interest rates. RBI, due to announce its monetary policy on January 28, is likely to hold the repo rate. This will further hit the industrial credit demand.
Market players are also maintaining a cautious stance ahead of the inflation data due to be released this week. The inflation numbers, which are expected to ease, will be watched out for further cues on determining the interest rate decision.
Call rates, G-Secs
The inter-bank call money rate, the rate at which banks borrow short-term money from each other, opened higher at 8.25 per cent from 8 per cent.
Yield on benchmark 8.83 per cent government bond, maturing in 2023, softened to 8.71 per cent from the previous close of 8.76 per cent. Prices opened higher at Rs 100.7 from Rs 100.45.
