The Indian unit had opened 71.66 a dollar.
The Indian unit had opened 71.66 a dollar.

Rupee falls against US dollar ahead of RBI monetary policy

  • Rupee closes at 71.69 a dollar, down 0.03% against Monday's close of 71.66
  • RBI’s bi-monthly monetary policy statement is due on Thursday

MUMBAI : Indian rupee on Tuesday weakened against the US dollar amid caution ahead of the Reserve Bank of India's bi-monthly monetary policy meeting starting Tuesday. Asian currencies were mixed as uncertainty over US-China disputes over human rights violations in Hong Kong.

Rupee closed at 71.69 a dollar, down 0.03% against Monday's close of 71.66. The Indian unit had opened 71.66 a dollar.

The three-day meeting of the central bank starting Tuesday and policy statement is due on Thursday. Eight of 10 economists and treasury heads surveyed by Mint expect RBI’s monetary policy committee (MPC) to cut the repo rate at which RBI lends to banks by 25 basis points (bps) to 4.9%, while maintaining an accommodative stance. Two expect the RBI to cut rates by 15 bps.

In the year so far, the rupee has weakened 2.65%, while foreign investors have bought nearly $13.37 billion in Indian equities and $4.24 billion in debt.

The yield on the 10-year Indian government bond was at 6.469% compared with its previous close of 6.489%. The benchmark index, Sensex closed at 40766.55 points down 0.31% or 126.72 points. Year to date, it has gained 12.77%.

Asian currencies were mixed as uncertainty over the phase one trade deal grew amid US-China disputes over human rights violations in Hong Kong.

The Japanese yen gained 0.12%, Malaysian ringgit and Singapore dollar were up 0.10% each, Indonesian rupiah 0.07%, Philippines peso 0.06% and Taiwan dollar 0.05%. However, South Korean won fell 0.33%, China offshore 0.29%, China renminbi 0.26%, Thai bhat 0.03% and Hong Kong dollar 0.01%.

The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 97.794 down 0.06% from its previous close of 97.856.

(Bloomberg contributed this story.)

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