The rupee rose against the dollar on Thursday afternoon due to dollar sales by some foreign banks, likely on behalf of their clients. Weak dollar demand, particularly from state-owned banks, also supported the rupee.
At 2.05pm, the home currency was trading at 63.82, up 0.32% from its previous close of 64.03. The local unit opened at 63.99 per dollar and touched a high and a low of 63.80 and 63.99, respectively.
“A couple of foreign banks are selling, particularly one based in London. There are definitely inflows in the market, but no one knows where are these flows from because even the stock market is weak,” said a dealer with a private bank. The local benchmark equity index Sensex was down 0.58%, or 157.02, points at 27,407.60 points.
Dealers are awaiting two key economic developments in the next couple of days. On Friday, the government will release the fourth quarter gross domestic product (GDP) growth numbers while on Tuesday, the Reserve Bank of India (RBI) will announce its interest rate decision.
The yield on India’s 10-year benchmark bond was trading at 7.65% compared with its Wednesday’s close of 7.67%. Bond yields and prices move in opposite directions.
Since the beginning of this year, the rupee has lost 1.25%, while foreign institutional investors have bought $6.84 billion from local equity and $6.11 billion from bond markets.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 97, down 0.38% from its previous close of 97.371.
Source:livemint.com
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