Rupee closes at fresh six-month low against US dollar
The rupee closed at 65.12 a dollara level last seen on 24 March, down 0.50% from its Friday's close of 64.80
Mumbai: The rupee on Monday weakened to a fresh six-month low against the US dollar after local equity markets fell for fifth consecutive sessions.
The rupee closed at 65.12 a dollar—a level last seen on 24 March, down 0.50% from its Friday’s close of 64.80. The home currency opened at 64.86 a dollar and touched a low of 65.18.
The benchmark Sensex index fell 0.93% or 295.81 points to closed at 31,626.63. So far this year, it has risen over 18.5%.
In last five sessions, Sensex declined over 2.46% or 800 points due to worries of overshooting fiscal deficit target and escalated tensions between US and North Korea.
“There’s some buzz around possible stimulus package which the government may announce to boost growth. However, market seems more concerned about its impact on fiscal deficit. Besides, anxiety around the geo-political tussle is adding fuel to the recent turmoil", said Jayant Manglik, president, retail distribution, Religare Securities Ltd.
The 10-year bond yield closed at 6.619%, compared to its previous close of 6.663%. Bond yields and prices move in opposite directions.
“Factoring in the global and domestic factors, we expect the 10-year benchmark yield in the range of 6.5-6.8% for the rest of FY2018. We hold on to our average USD-INR of 65.25 in FY2018 on the back of global monetary policy dynamics, geo-political risks, and India’s CAD-BOP dynamics", said brokerage firm Kotak Institutional Equities in a note to its investors.
“We had factored in a narrowing of the real interest differentials and Fed’s likely monetary/QE withdrawal policy. The heightened geo-political risks strengthen our case for a depreciating bias for the INR against the USD for rest of FY2018" Kotak report added.
All eyes were on Prime Minister Narendra Modi’s announcement on stimulus packages for housing, power and exports sector.
So far this year, the rupee has gained 4.3%, while foreign institutional investors have bought $6.24 billion and $20.55 billion in equity and debt, respectively.
Asian currencies were trading lower after surprising result in the German elections. Chancellor Angela Merkel won Germany’s election with a smaller share of the vote, Bloomberg reported.
China offshore was down 0.53%, China renminbi 0.49%, Singapore dollar 0.33%, Malaysian ringgit 0.16%, Japanese yen 0.13%, Indonesian rupiah 0.1%, Taiwan dollar 0.05%. However, South Korean won was up 0.43%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 92.55, up 0.39% from its previous close of 92.171.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!