Rupee closes at over one-month high of 66.21 against US dollar

Mumbai: The Indian rupee on Wednesday closed at over one-month high against the US dollar after the current account deficit (CAD) for the September quarter narrowed on a year-on-year basis. Gains in the local equity markets also boosted the sentiment. This was the seventh consecutive session when the rupee closed higher against the US currency.

The rupee closed at 66.21 a dollar, a level last seen on 20 November, up 0.25% from its previous close of 66.33. The local currency opened at 66.23 a dollar and touched a high of 66.12—a level last seen on 20 November.

India’s CAD narrowed to $8.2 billion (1.6% of gross domestic product, or GDP) in the September quarter from $10.9 billion (2.2% of GDP) in the year-ago quarter.

The Sensex was trading higher in seven out of 10 trading sessions. India’s benchmark equity index, BSE Sensex, closed at 25,850.30 points, up 1.01% or 259.65 points.

The yield on India’s 10-year benchmark bond closed at 7.749% compared with its Tuesday’s close of 7.76%. Bond yields and prices move in opposite directions.

The traders are cautions in a holiday-shortened week ahead.

Markets will remain closed on Friday for Christmas.

Since the beginning of this year, the rupee has weakened 4.6% against the dollar, while foreign institutional investors have bought $2.84 billion from local equity markets and $7.77 billion from the debt market.

Most of the Asian currencies closed mixed against the dollar. Indonesian rupiah was up 15%, Japanese yen 0.15%, Thai baht 0.07%. However, China offshore spot was down 0.29%, Singapore dollar 0.25%, Malaysian ringgit 0.25% and Philippines peso 0.07%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 98.318, up 0.08% from its previous close of 98.235.