Mumbai: The Indian rupee hit a fresh 28-month low against the US dollar on Monday after local equity markets fell over 300 points. The home currency is trading lower in eight out of eleven sessions.
At 3.16pm, the rupee was trading at 67.71 a dollar, down 0.16% from its previous close of 67.61. The local currency opened at 67.62 a dollar and touched a low of 67.72—a level last seen on 4 September 2013. The rupee has fallen 7.7% during this fiscal year.
India’s trade deficit widened to the most since August as a 179% surge in gold shipments slowed an overall decline in imports. The gap rose to $11.7 billion in December from $9.8 billion in November. The drop in imports slowed to about 4% in December from a year earlier after a 30% decline in November, even as exports plunged about 15%, Bloomberg report said.
India’s benchmark equity index, BSE Sensex, was trading at 24,182.82 points, down 1%, or 310 points. In the first two weeks of the current calendar year, the Sensex has fallen 7.2%, exceeding the decline it had recorded in the just-concluded previous calendar year. In 2015, Sensex declined 5.03%.
Asian currencies were trading higher. Taiwan dollar was up 0.27%, China offshore 0.24%, South Korean won 0.19%, Philippines peso 0.13%, Thai baht 0.12%, Philippines peso 0.13%, China renminbi 0.08%, Singapore dollar 0.07%. However, Japanese yen was down 0.32%, Indonesian rupiah 0.12%.
Meanwhile, the 10-year bond yield was trading higher for the seventh trading sessions as traders bet that the Reserve Bank of India (RBI) may not cut rates in the next policy given the jump in retail inflation in December. RBI is due to announce its bi-monthly policy on 2 February.
The yield on India’s current 10-year benchmark bond stood at 7.815% compared with its Friday’s close of 7.812%. Bond yields and prices move in opposite directions.
Since 1 April, the Sensex is down over 13%, while foreign institutional investors have sold $3.41 billion from local equity markets and bought $972 million from the debt market.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 99.087, up 0.13% from its previous close of 98.956.
Source :livemint.com
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