Rupee strengthens against US dollar, rises to 5-month high
The rupee today settled at 69.43, its highest close against the US dollar since early August.
Mumbai: The Indian rupee today strengthened against the US dollar, tracking gains in some Asian currencies. The rupee today settled at 69.43, up 34 paise from its previous close of 69.77. This was the highest close of the rupee since early August. The currency today opened at 69.72 a dollar. The 10-year bond yield stood at 7.42%, higher than its Monday’s close of 7.369%. Bond yields and prices move in opposite directions. Benchmark index Sensex gained 0.52% or 186 points to 36,254.57 points. In 2018, the Indian stock market index had gained 6.67%.
Last year, foreign investors sold $4.47 billion and $9.54 billion in equity and debt markets, respectively.
Many Asian markets were closed today on account of New Year. The dollar index, which measures the US currency’s strength against major currencies, was trading at 95.7, down from its previous close of 96.173.
The Indian rupee on Monday signed off the last trading session of 2018 with 18-paise gain at 69.77 per dollar. On year-over-year basis, the rupee in 2018 depreciated by a whopping 509 paise, or 9%, as compared to 2017-end level of 63.87.
Forex traders, however, said fundamentals are supportive for the rupee over the next 6-12 months amid supportive growth momentum and robust forex reserves.
“Attractive real yields (net of inflation), growth momentum and robust forex reserves of $394 billion and US dollar stabilisation is likely to be positive for the INR,” global financial services major Standard Chartered said in a research note.
However, in the near-term, the trend in the US dollar, oil price and ensuing general elections will determine the direction for the local unit, it noted.
(With agency inputs)
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