Rupee Hits Fresh 29-Month Low Against Us Dollar

The Indian rupee on Thursday hit fresh 29-month low against the US dollar after local equity markets fell over 800 points.

At 3.58pm, the home currency was trading at 68.31 per US dollar, down 0.66% from its previous close of 67.86. The local currency opened at 67.95 a dollar and touched a low of 68.31—a level last seen on 4 September 2013.

The Sensex index fell 3.4%, or 807.07 points, to 22,951.83. This was the fourth consecutive session when the index closed lower. Since 5 February till date, the index has fallen 6.82%. So far this year the index is down 12.17%.

Traders are also cautious ahead of the Index of Industrial Production (IIP) and Consumer Price Index (CPI)-based data due on 12 February after 5.30pm. According to Bloomberg estimates, IIP will be at zero for December as compared with -3.2% in November. CPI will be at 5.4% in January from 5.61% a month ago.

“Our equity markets are tanking and that’s getting reflected in the currency’s movement,” Bloomberg report said, quoting Gaurav Sharma, a senior currency analyst at Religare Commodities Ltd in Noida. “The rupee will chart its own course once the sell-off abates,” he said.

The yield on India’s 10-year benchmark bond was trading at 7.722% against Wednesday’s close of 7.817%. Bond yields and prices move in opposite directions.

Since the beginning of this year, the rupee has lost 3.05%, the worst performing currency in Asia, while foreign institutional investors have sold $1.89 billion from local equity and bought $444.10 million in bond markets.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 95.787, down 0.11% from the previous close of 95.888.

Asian currencies were trading mixed. Japanese yen was up 1.8%, Taiwan dollar 0.4%, China offshore 0.23%, Thai baht 0.16%, Indonesian rupiah 0.1%, Singapore dollar and Hong Kong dollar rose 0.08%. However, Malaysian ringgit was down 0.47%, South Korean won 0.35%, Indonesian rupiah 0.1%, Philippines peso and China renminbi declined 0.08%.

Source:- livemint.com