The rupee was higher against the US dollar on dollar inflows from foreign institutional investors (FIIs) as dealers sold the US currency, noting its weakness against global currencies.
Data from the US released on Friday showed that US companies added the least number of jobs in more than a year in March, raising expectations that a rate hike by the US Federal Reserve may be delayed.
The weak US data had ramifications on global currencies once the market opened on Monday. The Malaysian ringgit gained 1.049%, South Korean won gained 0.738%, Indonesian rupiah gained 0.556% and Taiwan dollar gained 0.168%.
At 2.40pm, the rupee was trading at 62.1775 per dollar, up 0.51% from its previous close of 62.4975. The partially convertible currency opened at 62.1050 a dollar and touched a high and a low of 62.1012 and 62.2075, respectively.
Since January this year, the rupee has gained 1.4%.
“There are dollar inflows in the market and the weakness of the US currency has also helped the rupee. It is only dollar buying from the state-owned banks likely on behalf of the Reserve Bank of India (RBI) which has kept the rupee from rising,” said a dealer with a foreign bank.
RBI has been buying dollars from the currency market through state-owned banks to shore up its foreign exchange reserves ahead of a impending US Fed rate hike which could lead to outflows from emerging markets like India.
A strong rupee also makes exports from the country less competitive.
Expectations are that the rupee will trade in the 62 to 62.50 per dollar this week.India’s benchmark 10 year bond yield was trading at 7.71% down from previous close of 7.73%.Sensex, the benchmark index of the Bombay Stock Exchange gained 0.73% or 205.63 points to 28,465.77 points.
Source:- livemint.com
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