The Indian rupee on Tuesday pared its losses and ended higher on Tuesday tracking the local equity markets and supported by suspected intervention by the Reserve Bank of India (RBI) in the currency market to curtail a sharp decline in the currency.
The rupee ended at 60.02 per dollar, up 0.24% from its previous close of 60.17. The currency opened at 60.36 per dollar and dropped to as low as 60.52, the weakest level since 29 April.
RBI was spotted selling dollars at around 60.49/50 rupee levels through state-owned banks to check the rupee’s sharp fall, Reuters reported citing traders. The central bank typically intervenes in the foreign exchange market to check excess volatility.
BSE’s benchmark Sensex rose 1.31% to close at 25,521.19 points.
The yield on India’s 10-year benchmark bond ended at 8.603%, compared with Monday’s close of 8.648%. Bond yields and prices move in opposite directions.The dollar index, which measures the US currency’s strength against major currencies, was trading at 80.515, up 0.05% from its the previous close of 80.47.
Since the beginning of this year, the rupee has gained 2.97% against the dollar, while foreign institutional investors have bought $9.94 billion from local equity markets.
On Monday, data showed that wholesale inflation accelerated to 6.01% in May from a provisional 5.2% a month ago, as food inflation quickened to 9.5% from 8.64%, while fuel prices were up by 10.53% compared with 8.93%.
Source:- livemint.com
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