The Central Bank also increased it Treasury bill holdings, undermining its own open market policy mechanism, hurting the rupee peg. Unsterilized purchases of foreign exchange, including through swaps has also undermined its own monetary policy.
The weighted average gilt repo rates have however repo rates have climbed from 9.0 percent on June 08 to 9.64 percent yesterday, Central Bank data showed.
Meanwhile un-backed call money was quoted around 10.50/75 percent. Call rates have climbed from 9.99 percent on June 08 to 10.61 percent on June 18.
On Monday the rupee ended weaker at 132.10/20 after opening around 131.70/80 percent.
The Central Bank has been injecting small amount of money to the market keeping it on a tight leash. On Tuesday it injected a billion rupees at 9.57 percent up from 9.51 percent a day earlier.
The Central Bank's Treasury bill stock which indicates the amount of monetary accommodation provided to the economy either as foreign loan settlements or cash injections has remained stable at around 230-232 billion for over a week after spiking up from 210 billion rupees on May 31.High short term rates discourage the holding of dollars by exporters and make it easier for the Central Bank to sell down its Treasury bill stock and reverse the direction of the currency peg.