BackRupee closes 26 paise weaker against US dollar at 67.76
The Indian rupee weakens for the ninth consecutive session against the US dollar, after foreign institutional investors continued to liquidate their investments in debt markets
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Mumbai: The Indian rupee on Tuesday weakened for the ninth consecutive session against the US dollar, after foreign institutional investors (FIIs) continued to liquidate their investments in debt markets. The fall in Asian currencies markets as fears of an early interest rate hike in June also dampened the sentiment.
The home currency closed at 67.76—a level last seen on 1 March, down 0.38% from its previous close of 67.50. The rupee opened at 67.64 per US dollar and touched a low of 67.76, a level last seen on 2 March. So far this year, rupee has fallen 2.36%.
FIIs have sold nearly $962.79 million in debt over the last ten trading sessions and have been sellers on all but one trading session over this period. So far this year, FIIs have remained net sellers of Indian debt and have offloaded $1.01 billion in domestic bonds.
Foreign investors have turned net sellers of Indian debt following a steeper-than-expected increase in inflation in April, which has reduced the possibility of further interest rate reductions from the Reserve Bank of India (RBI). The increased probability of a hike in interest rates by the US Federal Reserve during its June meeting may add to the negative sentiment around emerging market debt.
Asian currencies closed lower. Malaysian ringgit was down 0.93%, South Korean won 0.82%, Indonesian rupiah 0.47%, Japanese yen 0.38%, Singapore dollar 0.35%, Philippines peso 0.21%, Thai baht 0.19%, Taiwan dollar 0.12%, and China offshore 0.06%.
India’s benchmark Sensex index rose 0.30%, or 75.11 points, to close at 25,305.47. So far this year, the Sensex is down 3.11%. Year-to-date, FIIs have bought $1.96 billion from the local equity market.
India’s 10-year bond yield closed at 7.465%, as compared with its Monday’s close of 7.466%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 95.358, up 0.13% from its previous close of 95.231.
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