The Indian rupee was trading weak against the US dollar on Thursday afternoon, as banks sold the local currency noting the weakness in the local stock market and on doubts about the investment sentiment in India following the de-allocation of coal mines by the Supreme Court on Wednesday.
However, dollar sales by state-owned banks likely on behalf of the Reserve Bank of India (RBI) prevented the rupee from falling sharply.
At 1.55pm, the home currency was trading at 61.09, down 0.20% from its previous close of 60.97. It had opened at 60.96 and touched a low of 61.12. India’s benchmark index, Sensex was trading at 26,582.60 points on BSE, down 0.61%.
“The impact is sentimental. Local equities are down and that has spilled over to the rupee. Add to that the fact that the dollar is also stronger overseas has kept the rupee under pressure. If not for dollar sales by state-owned banks, the Indian currency could have fallen more sharply,” said a dealer with a French bank.
The yield on India’s 10-year benchmark bond was trading at 8.476%, compared with its Wednesday’s close of 8.482%. Bond yields and prices move in opposite directions.Since the beginning of this year, the rupee has gained 1.14%, while foreign institutional investors have bought $14.02 billion from local equity markets.The dollar index, which measures the US currency’s strength against major currencies, was trading at 85.395, down 0.42% from the previous close of 85.037.
Source:- livemint.com
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