BackRupee closes 22 paise stronger against US dollar at 64.82
The home currency strengthened as foreign investors started buying govt bonds after limits for foreign investment in the category were raised
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Mumbai: The Indian rupee strengthened against the US dollar for the second consecutive session on Thursday as foreign investors started buying government bonds after limits for foreign investment in the category were raised.
The gains in the local equity and Asian currencies market also boosted the sentiment.
The home currency closed at 64.82, up 0.33% from its previous close of 65.04. The local unit opened at 64.76 per US dollar and touched a high of 64.72 per dollar in intra-day trade.
Foreign institutional investors (FIIs) bought ₹ 714 crore of bonds on 14 October and ₹ 4,170 crore of bonds on 13 October, Bloomberg reported, quoting National Securities Depository Ltd (NSDL). FIIs bought $895.98 million ( ₹ 5,799.33 crore) in debt on 12 October, Mint reported.
The yield on India’s 10-year benchmark bond closed at 7.55% compared with its Wednesday’s close of 7.554%. Bond yields and prices move in opposite directions.
The benchmark Sensex index rose 0.86%, or 230.48 points, to close at 27,010.14.
Since the beginning of this year, the rupee has lost 2.75%, while FIIs have bought $3.99 billion from local equity markets and $7.94 billion from bond markets.
Most Asian currencies closed higher after weak US economic data added to expectations that the Federal Reserve will delay hiking interest rates. Malaysian ringgit rose 1.86%, South Korean won 1.48%, Indonesian rupiah 1.47%, Taiwan dollar 0.64%, Philippines peso 0.6%, Japanese yen 0.48%, and Thai baht 0.39%.
US retail sales and producer prices data that came on 14 October were weaker than expected, supporting growing views that the Fed would delay hiking interest rates until 2016. Data on August retail sales was also revised downward to nil growth and September producer prices also dropped by a greater than expected 0.5%, Reuters reported.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.079, up 0.16%, from its previous close of 93.931.
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