BackRupee weakens 32 paise to 61.09 on importers’ dollar demand, China data
The local currency opened at 60.88 and touched a low of 61.19, a level last seen on 21 March
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Mumbai: The Indian rupee fell for a third day, weakening past the 61-a-dollar level for the first time in more than a month, amid importers’ dollar purchases and on concern a decline in China’s factory output will damp demand for the region’s assets.
The rupee closed at 61.09, down 0.52% from its previous close of 60.77 per dollar. The local currency opened at 60.88 and touched a low of 61.19, a level last seen on 21 March.
“The momentum of dollar supply into the market has come down a bit, while the dollar demand from oil companies is persisting, weighing on the rupee," said N.S. Venkatesh, head of treasury at IDBI Bank Ltd.
“However, the rupee is comfortable in a range of 59-62 and will stay there in the medium term," Venkatesh said.
Besides the local factors, weak economic data from China, too, have put pressure on the currency, dealers said. “Continued dollar demand from oil importers is weighing on the rupee," said Vikas Babu, a Mumbai-based currency trader at Andhra Bank.
“Weak economic data from China is adding to the rupee’s fall," Babu said.
China’s Purchasing Managers’ Index for manufacturing was at 48.3 in April, compared with 48 in March, according to a preliminary reading published by HSBC Holdings Plc. and Markit Economics on Wednesday. A figure below 50 signals a contraction.
The rupee has gained 1.17% this year as foreign institutional investors (FIIs) have bought $4.84 billion worth of local stocks. BSE’s benchmark Sensex ended up 0.52% at 22,876.54 points.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 79.724, down 0.23% from the previous close of 79.905.
The yield on India’s 10-year benchmark bond ended at 8.851%, compared with its previous close of 8.851%. Bond yields and prices move in opposite directions.
Most Asian currencies fell. The Indonesian rupiah fell 0.94%, the Philippine peso declined 0.44%, the South Korean won shed 0.2%, the Taiwan dollar slid 0.06%, Thai Baht weakened 0.07% and the Singapore dollar fell 0.06%.
Markets will remain close on Thursday for Lok Sabha election in Mumbai.
Bloomberg contributed to the story
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