Rupee weak after dollar strengthens abroad
The rupee closed at 63.57, down 0.07% from its previous close, on signs that the US is on track to raise interest rates this year
Mumbai: The rupee on Monday snapped a two-day gain on signs that the US is on track to raise interest rates this year.
The currency opened at 63.62 per dollar and touched a high and a low of 63.53 and 63.67, respectively. The rupee closed at 63.57, down 0.07% from its previous close of 63.52.
The Sensex fell 1.12% or 313.62 points, to close at 27,643.88 points.
The yield on India’s 10-year benchmark bond closed at 7.864% compared with its Friday’s close of 7.857%. Bond yields and prices move in opposite directions.
Raising borrowing costs in 2015 will be “appropriate”, provided the economy meets forecasts, Federal Reserve chair Janet Yellen said in a speech in Providence, Rhode Island, on Friday.
“Yellen’s statement has helped lift the dollar against most major currencies,” said Sandeep Kanihama, a foreign- exchange analyst at Religare Commodities Ltd. “The Fed rate increase is a negative for the rupee.”
Since the beginning of this year, the rupee has lost 0.75%, while foreign institutional investors have bought $6.80 billion from local equity and $6.02 billion from bond markets.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 96.352, up 0.35% from its previous close of 96.014.
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