TThe rupee on Wednesday closed just a paisa lower at 63.38 against the dollar, the narrowest movement in four months, as the currency market remained directionless ahead of the outcome of the US Federal Reserve policy meeting. The local currency resumed weak at 63.45 a dollar from the previous close of 63.37 at the interbank foreign exchange market and dropped to a low of 63.46.
It bounced back to a high of 63.04 on firm local equities and slipped again on dollar demand from importers, mainly oil refiners, to end at 63.38, a fall of one paisa.
The Fed’s decision on tapering its monthly $85 billion bond-buying programme is expected later on Wednesday night. “Rupee along with most asset classes are on a wait and see mode with US FOMC meeting slated tonight,” said Anindya Banerjee, currency analyst at Kotak Securities.
Bonds gain
Indian government bonds rose on Wednesday, with the focus subsequently shifting to the local central bank's monetary policy review on Friday, with most economists expecting it to hold rates. The 10-year bond yield closed 7 basis points lower at 8.37%. It traded in a 8.37-8.45% band during the session. In the overnight indexed swap market, the benchmark five-year rate closed 5 bps lower at 8.30%.
