Mumbai: The Indian rupee erased all the morning losses and was trading little changed against the US dollar, following cues from the local equity markets.
At 2.18pm, the rupee was trading at 67.94 a dollar, up 0.01% from its previous close of 67.96. The local currency opened at 67.89 a dollar and touched a high and a low of 67.82 and 68.10, respectively. The rupee has fallen in 10 out of 14 trading sessions.
India’s benchmark equity index, BSE Sensex, was trading at 24,057.89 points, down 0.02% or 5.62 points. Earlier in the morning, the Sensex gained as much as 250 points.
Most Asian currencies were trading higher. Indonesian rupiah was up 0.51%, Malaysian ringgit 0.45%, Philippines peso 0.11% and Hong Kong 0.1%. However, Taiwan dollar was down 0.27% and China offshore spot 0.17%.
So far this year, the Sensex is down over 7.5% and the rupee has weakened 2.5%. So far this year, foreign institutional investors have sold $1.23 billion from local equity markets and bought $242.80 million from the debt market. Brent crude is down 24.4%.
Traders are cautious ahead of the European Central Bank’s policy meet on interest rates later today. The ECB is expected to warn that inflation could stay ultra-low for longer due to plunging oil prices, weak Chinese growth and the lack of decisive fiscal policy action at home, Reuters reported.
The yield on India’s current 10-year benchmark bond stood at 7.751% compared with its Wednesday’s close of 7.797%. It opened at 7.797% and touched a low of 7.736%, a level last seen on 8 January. Bond yields and prices move in opposite directions.
The Reserve Bank of India (RBI) sees scope for policy easing if disinflation persists. “Going forward, we have to disinflate a little more. So, at the meeting (on 2 February), we will take all these factors into account and decide what the next step is, but broadly I would say we are on the right path,” RBI governor Raghuram Rajan said in an interview to CNBC at Davos.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 99.0536, down 0.03% from its previous close of 99.091.
Source :.livemint.com
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