The rupee on Tuesday fell for the first time in six days on speculation importers bought dollars at a cheaper rate after the local currency rose to a one-month high.The rupee fell 0.3% to 48.735 a dollar at the close.
"Dollar demand strengthened on Tuesday a bit as it appears unlikely the rupee will be able to hold on to the recent rising streak," said Roy Paul, assistant manager of treasury at Federal Bank Ltd in Mumbai. "The undertone is not entirely positive for the rupee."
It may decline to 49.50 in a few weeks, Paul said.
Bonds fell for a second day after the government said it will sell Rs 46,000 crore of additional debt in four parts between Feb 20 and March 20 to fund economic stimulus packages. The yield on the most traded 2018 notes has climbed more than a percentage point so far in 2009 because of the increased supply to finance the extra spending aimed at reviving economic growth. The amount was more than investors expected, pushing yields higher, according to KP Suresh Prabhu, assistant manager of treasury at HDFC Bank Ltd. The yield on the 8.24% note due April 2018 rose 16 bps to 6.49% at the close. The government has so far raised Rs 2.4 trillion through debt sales , compared to Rs 1.79 trn it originally budgeted, based on data provided by the central bank.
"Dollar demand strengthened on Tuesday a bit as it appears unlikely the rupee will be able to hold on to the recent rising streak," said Roy Paul, assistant manager of treasury at Federal Bank Ltd in Mumbai. "The undertone is not entirely positive for the rupee."
It may decline to 49.50 in a few weeks, Paul said.
Bonds fell for a second day after the government said it will sell Rs 46,000 crore of additional debt in four parts between Feb 20 and March 20 to fund economic stimulus packages. The yield on the most traded 2018 notes has climbed more than a percentage point so far in 2009 because of the increased supply to finance the extra spending aimed at reviving economic growth. The amount was more than investors expected, pushing yields higher, according to KP Suresh Prabhu, assistant manager of treasury at HDFC Bank Ltd. The yield on the 8.24% note due April 2018 rose 16 bps to 6.49% at the close. The government has so far raised Rs 2.4 trillion through debt sales , compared to Rs 1.79 trn it originally budgeted, based on data provided by the central bank.
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