Rupee weakens against US dollar ahead of RBI policy announcement
So far this year, the rupee is down 2.5% against US dollarMost Asian currencies are lower against US dollar today
Indian rupee on Thursday weakened, tracking losses in Asian currencies as dollar extended its gains for sixth sessions. Traders are cautious ahead of the key Reserve Bank of India's bi-monthly policy due at 11.45 am today. At 9.05 am, the rupee was trading at 71.76 a dollar, down 0.24% from its previous close of 71.56. The home currency opened at 71.67 a dollar.
A majority of bank treasury heads surveyed by Mint expects RBI to announce a status-quo policy, while changing the policy stance from calibrated tightening to neutral. Falling inflation, along with an expansionary budget, could push the RBI to maintain the policy rates unchanged, said a section of bankers. However, some bankers are not ruling out a 25 basis points (bps) cut before the upcoming general election.
So far this year, the rupee has declined 2.5% against the US dollar, while foreign investors have bought $69 million in equity and sold $633.90 million in debt market.
Also read: RBI governor Shaktikanta Das: A hawk or a dove?
The 10-year bond yield was trading at 7.357%, compared to its Tuesday's close of 7.358%. Bond yields and prices move in opposite directions.
Asian currencies were trading lower. China Renminbi was down 0.68%, Indonesian rupiah 0.39%, South Korean won 0.30%, Taiwan dollar 0.11%, Thai Baht 0.07%. However, Malaysian ringgit was up 0.36%, Japanese yen and Philippines peso were up 0.07% each.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 96.433, up 0.04% from its previous close of 96.39.
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