Mumbai: The Indian rupee weakened marginally against the dollar in thin trade on Tuesday as foreign exchange dealers looked for a clear direction for the Indian currency after recent measures taken by the Reserve Bank of India (RBI) and the government.
The partially convertible rupee closed at 59.77 per dollar, down 0.07%, compared with its close of 59.72 on Monday. The currency hit an intra-day high of 59.48 per dollar.
“Trade is thin today because dealers are also awaiting the next move by RBI in its first quarter monetary policy review next Tuesday. There is a section of the market which expects the central bank to hike its repo rate in the next monetary policy meeting but demand for the dollar is also strong because some think the rupee’s fundamentals will ensure it weakens further,” said a dealer with a private bank.
In its latest move on Monday, RBI tightened gold imports to reduce record current account deficit.
Strength in the Indian stock market also helped the currency. The BSE Sensex gained 0.71% to 20,302.13 points tracking Asian markets which have risen after Japanese prime minister Shinzo Abe secured a majority in the upper house.
Since January this year, the rupee has lost 7.98% and is the second biggest loser among Asian currencies after Japanese yen.