BackRupee closes at 61.50 a dollar in thin trade ahead of Diwali
The rupee opened at 61.3775 per dollar and touched a low of 61.5662 in the intra-day trade
Premium
Mumbai: The rupee weakened against the US dollar on Thursday as dealers awaited fresh global or local cues.
The Indian rupee ended at 61.4950 per dollar, down 0.45% from its previous close of 61.2375. The rupee opened at 61.3775 per dollar and touched a low of 61.5662 in the intra-day trade.
“The rupee is stuck in the broad ₹ 61 to ₹ 62 per dollar as there are no fresh reasons to buy or sell the Indian currency. Unless there is some announcement by the Reserve Bank to bring back a part of the dollar demand from oil companies into the market or to close the FCNR (B) (foreign currency non-resident bank deposits) window, trade is likely to be thin," said a dealer with a private bank.
The Reserve Bank of India (RBI) had announced a special swap window for oil companies in August to support a free falling rupee. Later in September the central bank had announced that foreign currency deposits by banks will be given a subsidy at 3.5%, to attract more inflows into India. RBI has collected a total of $12.1 billion through this window, governor Raghuram Rajan said in a post monetary policy interaction earlier this month.
Both these measures have had a positive impact on the rupee. The rupee was once the biggest loser in Asia but has since risen to be the third biggest loser.
Since January this year, the rupee has weakened 10.57% and has lost the third most after Indonesian rupiah and Japanese yen among Asian currencies during that period.
“Market talk is that RBI has set a $20 billion target to attract FCNR (B) deposits and we expect this window to be opened right up till RBI-prescribed date of 30 November," said the dealer with the private bank.
Traders are also reluctant to take dollar positions ahead of the Diwali weekend from Saturday. The markets are shut on Monday for the Diwali festival.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 79.962, up 0.24% from the previous close of 79.777.
India’s benchmark equity index Sensex ended at 21,164.52, up 130.55 points, or 0.62%, from the previous close.
The yield on the 10-year benchmark bond ended at 8.628%, up from previous close of 8.574%.
Overnight call money rate ended at 8.7%.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
