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Business News/ Market / Stock-market-news/  Rupee closes at 63.38 per dollar ahead of Fed decision
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Rupee closes at 63.38 per dollar ahead of Fed decision

The rupee strengthened to 63.05 per dollar in the intra-day trade

Most analysts see the rupee strengthening from its current level in the medium to long term. Photo: Pradeep Gaur/Mint (Pradeep Gaur/Mint)Premium
Most analysts see the rupee strengthening from its current level in the medium to long term.

Photo: Pradeep Gaur/Mint
(Pradeep Gaur/Mint)

Mumbai: The value of the rupee against the dollar was little changed from Tuesday’s close and ahead of a crucial decision by the US Federal Reserve whether it’ll taper its $85 billion monthly bond-buying programme.

The local currency closed at 63.3750 a dollar, against its previous close of 63.3725, even as Sensex, the benchmark equities index, rose 0.80%, or 158.13 points, to 19,962.16.

The rupee was holding steady at around 63.20 but lost towards the end of trading.

The dollar index, which tracks the US currency’s strength against major global currencies, fell 0.01% to 81.1320 at the time the rupee market closed.

The volume in the currency market was thin as currency dealers avoided taking position before the Fed’s announcement and the Reserve Bank of India’s (RBI’s) monetary policy outcome on 20 September. The indian central bank was largely absent from the market, currency dealers said.

In intra-day trading, the rupee had strengthened to 63.05 per dollar.

“Indian rupee along with most asset classes are on a wait-and-see mode with US FOMC (Federal Open Market Committee) meeting slated for tonight," said Anindya Banerjee, an analyst at Kotak Securities Ltd.

“In case the Fed does not change the language to dovish and does a taper between $10-15 billion, the Indian rupee could come under pressure. A range of 61.50 to 64.50 could be seen over this week," Banerjee wrote in a note.

However, most analysts see the rupee strengthening from its current level in the medium to long term.

India Ratings and Research Pvt. Ltd, the domestic arm of global rating agency Fitch, said it expects the domestic currency to recover to 59-61 a dollar by the end of fiscal year 2014.

The yield on the 10-year bond closed at 8.3715% against its previous close of 8.446%. The overnight interbank call money rate closed at 10.25%.

In the offshore non-deliverable forwards, the one-month contract was at 64.05, while the three-month was at 65.26.

In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 63.43 with total traded volume of $1.9 billion.

Reuters contributed to this story.

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Published: 18 Sep 2013, 09:33 AM IST
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