Home / Market / Stock-market-news /  Rupee ends higher against dollar

Mumbai: The rupee ended higher against the US dollar on Thursday, tracking the gains of other Asian currencies and bolstered by expectations that the likely decision of US Federal Reserve to keep interest rates low in the long run might support demand for assets in emerging markets.

The rupee ended at 60.09, up 0.53% above its previous close of 60.40. The unit touched a high of 59.86 during the day.

The US central bank’s federal open market committee (FOMC), which sets rates in the world’s largest economy, reduced monthly bond purchases by $10 billion for a fifth straight meeting to $35 billion, keeping it on pace to end the programme late this year. It also said that economic activity in the US is rebounding and suggested that interest rates in the long run would be lower. The comment spurred hopes that demand for emerging market assets will continue.

The Indian currency led the advance across Asian foreign-exchange markets, while the MSCI Asia Pacific Index of shares climbed the most since February.

“The FOMC statement on interest rates is clearly positive for the rupee," said Ankur Jhaveri, co-head of currency and rates in Mumbai at brokerage Edelweiss Financial Services Ltd. “A stable and improving US economy is good for India’s exports and inflows."

Most of the Asian currencies ended higher. The Philippine peso rose 0.84%, Malaysian ringgit 0.7%, Indonesian rupiah 0.5%, South Korean won 0.4%, Japanese yen 0.1%, and Taiwan dollar 0.1%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 80.23, down 0.44% from its previous close of 80.584.

India’s equity benchmark Sensex ended at 25,201.8 points on the BSE, down 0.18%.

The yield on India’s 10-year benchmark bond ended at 8.891%, the highest since 28 May, compared with Wednesday’s close of 8.667%. Bond yields and prices move in opposite directions.

Since the beginning of this year, the rupee has gained 2.85% against the dollar, while foreign institutional investors have bought $9.92 billion from local equity markets.

Bloomberg contributed to this story.

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