Rupee trades higher at 67.03 against US dollar
The rupee closed at 67.0587 per dollar, up 0.01% from its previous close of 67.055
Mumbai: The rupee on Friday erased all the gains and was trading little changed against the US dollar, as traders turned cautious ahead of the speech from US Federal Reserve chair Janet Yellen due later on Friday.
Traders are also waiting for the gross domestic product (GDP) data for the June quarter due on 31 August. According to Bloomberg analyst estimates, GDP may be at 7.5% compared with 7.9% in the March quarter.
The rupee closed at 67.0587 per dollar, up 0.01% from its previous close of 67.055. The rupee opened at 67.01 per dollar and touched a high of 66.99, a level last seen on 19 August.
On Thursday, the Reserve Bank of India (RBI) said it will move to cap exposure of banks to large borrowers while also taking steps to deepen the corporate bond market. Starting next fiscal year, banks will have to set aside higher provisions for incremental lending to borrowers who have a certain amount in outstanding loans from the banking sector, Mint reported.
RBI also said it will take a number of steps to deepen the corporate bond market. As a first step, RBI said it will allow banks to provide greater credit enhancement to bond issues, the Mint report added.
The 10-year bond yield was trading at 7.129%, compared with its Thursday’s close of 7.123%. Bond yields and prices move in opposite directions.
Traders are eagerly awaiting a speech from Yellen on Friday on the US economy and monetary policy at the Economic Policy Symposium at Jackson Hole, Wyoming. Yellen’s remarks will follow hawkish comments from Fed vice-chairman Stanley Fischer and New York Fed president William Dudley, Reuters reported.
India’s benchmark Sensex index lost 53.66 points, or 0.19%, to 27,782.25. So far this year, it has gained 6.37%.
The rupee is down 1.34% till date this year, while foreign institutional investors have bought $5.83 billion in equity and sold $1.23 billion in debt markets.
Asian currencies were trading mixed. The Indonesian rupiah gained 0.227%, South Korean won gained 0.176% and Japanese yen was up 0.090%. However, China offshore was down 0.214%, Hong Kong dollar 0.009% and China renminbi fell 0.186%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.664, down 0.11% from its previous close of 94.772.
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