Rupee Declines Marginally To 60.48 On Dollar Demand From Public Sector Banks

The rupee declined marginally against the US currency as dollar inflows likely from foreign institutional investors (FIIs) were absorbed by demand from public sector banks.

Currency dealers avoided taking fresh dollar positions ahead of the long weekend starting on Friday. Local banks and the stock market is shut on Friday for Ganesh Chaturthi.

The Indian currency opened at 60.40 and touched a high and a low of 60.36 and 60.50 per dollar, respectively. At 2.30pm, the home currency was trading at 60.48, down 0.05% from previous close of 60.45. BSE’s benchmark Sensex was trading at 26,616.73 points, up 0.21%.

“The rupee had opened higher but since then there has been buying from public sector banks which has kept the rupee under check. it could be that these banks are buying dollars on behalf of the Reserve Bank of India (RBI) to prevent the rupee from rising sharply,” said a dealer with a private bank.

Since the beginning of this year, the rupee has gained 2.17%, while foreign institutional investors have bought $12.91 billion during the period from local equity markets. The dollar index, which measures the US currency’s strength against major currencies, was trading at 82.357, down 0.09% from the previous close of 82.428. ?

The currency’s movement was also limited in the absence of an new economic data globally or from India.The yield on India’s 10-year benchmark bond was trading at 8.56%, compared with its Wednesday’s close of 8.55%. Bond yields and prices move in opposite directions.

The government will release gross domestic product data for the June quarter on 29 August. Analysts expect GDP for the first quarter to be at 5.5%, up from 4.6% in the March quarter. India’s fiscal deficit data will also be released on Friday.

Source : livemint.com