Mumbai, Oct 3:
The rupee was trading strong by 58 paise at 61.89 against the dollar at 12.08 p.m. local time.
The domestic unit gained 32 paise to 62.15 per dollar in the opening trade against the previous close of 62.47 as the American currency weakened against a basket of currencies after the US Government shut down.
Currency traders remained hopeful that the shutdown will delay the end of tapering of the $85-billion monetary stimulus.
"Immediately after this news (of shut down), the US dollar index fell below the key level of 80 against major currencies and the rupee started to gain," said Abhishek Goenka, India Forex Advisors.
Current account deficit
Provisional data released by the Reserve Bank of India showed that India's current account deficit widened to 4.9 per cent of the gross domestic product in the quarter ended June 30, 2013 from 4 per cent in the year ago quarter.
This, however, was lower than what the markets were expecting. Also, economists, in their notes have expressed confidence that the CAD for the full year will be capped at $70 billion, or 3.8 per cent of the GDP for the full year, as projected.
A high CAD is detrimental to the currency as a higher gap will require more dollars to fund it.
Call rates , G-Secs
The inter-bank call money rate, the rate at which banks borrow from each other to meet their short-term fund requirement, ended at 9.7 per cent against the previous close of 9.35 per cent.
The 7.16 per cent government security, which matures in 2023, opened higher at Rs 89.98 from the previous close of Rs 89.90. Yields softened to 8.71 per cent from the previous close of 8.73 per cent.
(This article was published on October 3, 2013)
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