BackRupee recoups losses, closes 9 paise higher against US dollar at 66.67
The rupee recouped all the losses to end stronger against the US dollar on hopes that domestic economic growth numbers would be better than expected and as the fiscal deficit narrowed
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Mumbai: The Indian rupee on Monday recouped all the losses to end stronger against the US dollar on hopes that domestic economic growth numbers would be better than expected and as the fiscal deficit narrowed.
The home currency closed at 66.67, up 0.13% from its previous close of 66.76. The local unit opened at 66.84 a dollar and touched a high and a low of 66.63 and 66.87, respectively.
The country’s fiscal deficit stood at ₹ 4.11 trillion during April-October, or 74% of the target for FY16. The deficit was 89.6% of the target in the same period last year, according to Controller General of Accounts website.
The central government will release third quarter gross domestic product (GDP) data later on Monday which could show that India’s economy grew by 7.3%, a bit stronger than the previous quarter.
However, traders are cautious and trade volume is subdued as a slew of events are slated in the coming weeks.
The Reserve Bank of India (RBI) will release its bi-monthly policy on Tuesday wherein the central bank is expected to keep rates unchanged after delivering a surprise 50 basis points rate cut in September. Later this week, US non-farm payroll data would be released which could sway the Federal Reserve’s decision on rates. The European Central Bank (ECB) too would decide on its accommodative policy this month.
The benchmark Sensex index rose 0.07%, or 17.47 points, to close at 26,145.67.
The yield on India’s 10-year benchmark bond closed at 7.786%, a level last seen on 7 September, compared with its Friday’s close of 7.76%. It opened at 7.744% and touched a high of 7.814%, a level last seen on 26 August. Bond yields and prices move in opposite directions.
Foreign portfolio investors have pulled out more than $1 billion from the domestic equity and bond market over the last one month. In 2015-16 so far, foreign institutional investors (FIIs) have sold $2.40 billion in equity, the steepest selling since fiscal year 2009. In 2015-16, FIIs were the net sellers in equity in five out of eight months.
Since the beginning of this year, the rupee has lost 5.44% against the dollar, while FIIs have bought $3.59 billion from local equity and $8.30 billion from bond markets.
Most Asian currencies closed lower. South Korean won was down 0.42%, Indonesian rupiah 0.33%, Japanese yen 0.24%, Malaysian ringgit 0.15%, Philippines peso 0.14%, Taiwan dollar 0.1%. However, China offshore was up 0.28% and Thai baht 0.1%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 100.26, up 0.24% from its previous close of 100.02.
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