5098

Rupee ends nearly flat as positive factors hold

The rupee closes 0.04% up at 59.68 per dollar; yield on 10-year benchmark bond ends 0.59% down at 7.47%
Comment E-mail Print Share
First Published: Thu, Jul 11 2013. 09 22 AM IST
Steps by the banking and market regulators last week and positive signals from global markets helped the currency.  Photo: Mint
Steps by the banking and market regulators last week and positive signals from global markets helped the currency. Photo: Mint
Updated: Thu, Jul 11 2013. 08 40 PM IST
Mumbai: The rupee ended steady and bond yields fell on Thursday, drawing comfort from several factors that have boosted confidence in the financial markets, even if temporarily. This included steps by the banking and market regulators last week to shore up the rupee and positive signals from global markets.
The rupee ended at 59.68 against the dollar, up 0.04% from the previous close, after touching an intra-day high of 59.33.
This prompted dealers to forecast a further rise in the value of the currency in the approaching sessions.
“Most of the factors support further improvement in the value of the rupee next week. The rupee might break 58 levels next week,” said a chief forex dealer at a public sector bank. He did not want to be named as he is not authorized to talk to press.
Besides regulatory steps by the Reserve Bank of India (RBI) and Securities and Exchange Board of India (Sebi) earlier this week, comments by US Federal Reserve chairman Ben Bernanke also saw sentiment turning positive.
On Wednesday, Bernanke said a highly accommodative monetary policy would be needed for the foreseeable future, sparking hopes that any tapering of the asset-purchase programme wasn’t necessarily imminent, Reuters reported.
Since its all-time low of 61.21 per dollar, reached on 8 July, the local currency has appreciated more than 2.5% but has lost 7.85% since January, losing the most among Asian currencies during that period. In June, foreign institutional investors (FIIs) sold $1.76 billion of equity, but since the beginning of this year they have been net buyers to the extent of $13.52 billion.
On Thursday, the yield on India’s 10-year benchmark bond ended at 7.47%, down 0.59%, from the previous close of 7.51%. The dollar index, which measures the US currency’s strength against major currencies, was trading at 82.98, down 1.27% from the previous close.
On Monday, RBI said banks “should not carry out any proprietary trading in the currency futures/exchange-traded currency options markets”. Any such trades could only be on the behalf of clients, the regulator said.
Sebi followed this up on Tuesday by raising margin requirements, or the money to be provided upfront on trades, and curtailing open positions—which limits the extent of trading—on currency derivatives starting 11 July.
On Thursday, RBI governor said it was difficult to estimate when the rupee will reverse declines and that inflation remains elevated.
“The rupee depreciation over the last six weeks has been because of global factors,” D. Subbarao told reporters in Indore in central India. “It’s difficult to say how long that effect will persist because (these are) factors beyond our control.”
Comment E-mail Print Share
First Published: Thu, Jul 11 2013. 09 22 AM IST
blog comments powered by Disqus
  • Wed, Apr 16 2014. 06 11 PM
  • Wed, Apr 09 2014. 05 19 PM
ALSO READ close

Rupee gains as RBI sells dollars

Subscribe |  Contact Us  |  mint Code  |  Privacy policy  |  Terms of Use  |  Advertising  |  Mint Apps  |  About HT Media  |  Jobs
Contact Us
Copyright © 2014 HT Media All Rights Reserved