The rupee erased its initial gains and was trading weak by 6 paise at 61.29 against the dollar at 2.20 p.m. local time.
After resuming higher at 61.19 against the last closing level of 61.23, the rupee rallied to a two-month high of 60.92 against the US dollar in the late morning trade on persistent selling of the dollar by banks and exporters on the back of sustained capital inflows from foreign funds.
But the domestic unit fell to 61.71 after reports by a television channel that the government is considering closing the dollar swap window offered to oil companies.
However, the rupee recovered to 61.30 levels after the RBI issued a statement saying: “The OMC swap window remains operational. Any tapering of the window, as and when it occurs, will be done in a calibrated manner.''
In the New York market, the dollar fell yesterday as US lawmakers reached a deal to avoid default and end the 16-day partial government shutdown, with currency analysts now looking at another Washington showdown, possibly early next year
US President Barack Obama had also signed a Bill that ended the 16-day government shutdown that has caused billions of dollars in losses.
The inter-bank call money rate, the rate at which banks borrow from each other to meet their short-term fund requirements, opened higher at 9.05 per cent against the previous close of 8.95 per cent.
The 7.16 per cent government security, which matures in 2023, opened lower at Rs 90.65 against the previous close of Rs 90.70.
The yields hardened a tad to 8.61 per cent from 8.60 per cent. Bond yields and prices move in opposite directions.
