Home >Market >Stock-market-news >Rupee closes at 67.04 per US dollar

Mumbai: The Indian rupee on Thursday strengthened for the third session in a row to hit a two-week high against the US dollar, tracking gains in the local equity markets over optimism that the government may pass the goods and services tax bill in the current parliament session.

The home currency closed at 67.04—a level last seen on 14 July, up 0.17% from its previous close of 67.15. The rupee opened at 67.07 and touched a high of 66.99 a dollar, a level last seen on 15 July.

India’s 10-year bond yield closed at 7.191%, a level last seen on 30 May 2013, compared with its Wednesday’s close of 7.251%. It fell 6 basis points from its previous close, its steepest fall since 29 February.

India’s equity benchmark Sensex index rose 0.66% or 184.29 points to close at 28,208.62 points. So far this year, it has gained 8.01%.

The Union cabinet approved key changes to the Constitution Amendment Bill for the Goods and Services Tax (GST), doing away with a 1% additional levy on supply of goods, and proposing full compensation to states for five years for revenue loss arising from transition to GST.

Expectations that the US Federal Reserve may not hike interest rates this year also helped the Indian currency. Such hopes strengthened after the Fed left key rates unchanged at its two-day meet.

Further, the Federal Open Market Committee (FOMC) members upgraded their assessment of the US economy in their monetary policy statement released on Wednesday after their two-day meeting. They declared that near-term risks to the outlook have diminished and said labour utilization has shown “some increase", though inflation remains too low, Reuters reported.

Asian currencies advanced as the Fed reiteration of a gradual approach to rate increases spurred broad dollar weakness. South Korean won gained 0.87%, Malaysian ringgit 0.73%, Japanese yen 0.64%, Taiwan dollar 0.34%, Indonesian rupiah 0.3%, Philippines peso 0.25%, Singapore dollar 0.19%, China Renminbi 0.17%, Thai baht 0.15% and China Offshore 0.08%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 96.588, down 0.49% from its previous close of 97.053.

So far this year, the rupee is down 1.32%, while foreign institutional investors have bought $4.24 billion in equity and sold $822.80 million in debt markets.

Investors now await the outcome of Bank of Japan’s two-day policy meeting starting Friday.

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