Rupee closes 0.3% lower, steepest fall in two month against US dollar
Mumbai: The Indian rupee on Tuesday closed 0.3% lower—its steepest fall in two month—against US dollar on the concerns over weaker forecast of economic growth.
The home currency closed at 63.72 a dollar, down 0.33%, its steepest fall since 13 November 2017, from its Monday’s close of 63.50. The rupee opened at 63.48 a dollar, and touched a high and a low o7263.43 and 63.59, respectively.
On Friday, the government forecast economic growth slowing to 6.5% in the year to 31 March from 7.1% in the previous year. The forecast released by the Central Statistics Office assumes that the economy is on a recovery path. The economy grew at 6% in the six months ended 30 September, indicating that it will accelerate to 7% in the second half ending 31 March, if the forecast is to come true.
Traders are cautious ahead of the Index of Industrial Production (IIP) data for November and Consumer Price Inflation (CPI) for December on 12 January. According to Bloomberg analysts’ estimate, IIP will be at 4% in November from 2.2% a month ago, while CPI will be at 5.04% in December from 4.88% a month ago.
The benchmark Sensex rose 0.26%, or 90.40 points, to 34,443.19. Local equity markets rose for the fourth consecutive session and advanced nearly 2.2% or 700 points.
In the year 2017, the rupee gained 6.35% and Sensex rose 28%, while foreign institutional investors have bought $7.73 billion and $23.27 billion in equity and debt, respectively.
The 10-year bond yield was at 7.351% compared to its previous close of 7.344%. Bond yields and prices move in opposite directions.
Asian currencies were trading lower. China Offshore was down 0.54%, China renminbi 0.39%, Philippines peso 0.28%, Malaysian ringgit 0.26%, Singapore dollar 0.26%, Thai baht 0.16%, South Korean won 0.11%, Taiwan dollar 0.05%. However, Japanese yen was up 0.18%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 92.449, up 0.1% from its previous close of 92.358.