Rupee closes near two-week high1 min read . Updated: 24 Jun 2019, 05:22 PM IST
- So far this year, the rupee has fallen 0.2% against the US greenback
- The 10-year bond yield was at 6.846%, compared with Friday's close of 6.856%
MUMBAI : The Indian rupee on Monday closed stronger against the US dollar, tracking gains in Asian currencies.
The rupee closed at 69.35 a dollar, up 0.32% from its previous close of 69.58. The Indian currency had opened at 69.61 a dollar.
Gilt yields closed flat amid uncertainty about the transfer of surplus funds by the central bank to the government after a Bloomberg report said the report by a committee to decide on surplus-funds transfer might get delayed. The 10-year bond yield was at 6.851%, compared with Friday's close of 6.856%.
Traders were cautious after a Business Standard report said Viral Acharya, deputy governor of the Reserve Bank of India, resigned six months before his term was to end citing “unavoidable personal reasons".
Acharya, who was in charge of monetary policy, will return to New York University as a professor of economics in August instead of February 2020, according to the newspaper.
The process of finding his successor now begins. Business Standard reported that two possible contenders are Sanjeev Sanyal, principal economic advisor in the ministry of finance, and Michael Patra, RBI monetary policy committee (MPC) member.
"At the margin, the composition of the MPC will likely become incrementally more dovish, in our view, as Acharya stood on the more hawkish side of the policy spectrum. Patra’s views are well known, while Sanyal has argued for lowering the cost of capital in the past. Other candidates could be discussed in the coming days," a Nomura Research report said.
For now, the focus shifts to Acharya’s successor, the submission of the Bimal Jalan committee report on the RBI’s economic capital framework and the Union budget (5 July), the Nomura report added.
The benchmark Sensex index was down 0.18% at 39,122.96 points. Year to date, the index has risen 8.67%.
So far this year, the rupee has fallen 0.2% against the greenback. During the period, foreign investors bought $11.17 billion in Indian equities and $1.40 billion in the debt market.
Most of Asia’s emerging market currencies edged higher on the back of weakness in the dollar, extending the risk-on move that was spurred by the Federal Reserve’s dovish tilt last week.
The South Korean won was up 0.56%, Indonesian rupiah 0.20%, Thai baht 0.15%, Taiwan dollar 0.12%, Singapore dollar 0.1% and Malaysian ringgit 0.08%. However, China Offshore was down 0.11% and the Chinese renminbi 0.11%.