Rupee closes weaker against US dollar at 68.16

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Mumbai: The Indian rupee on Friday weakened against the US dollar, tracking losses in the Asian currencies markets.

The home currency closed at 68.16 a dollar—down 0.11% from Thursday’s close of 68.08. The rupee opened at 68.17 a dollar and touched a high and a low of 68.14 and 68.26 respectively . So far this year, it has fallen 0.1%.

Asian currencies were trading weaker. Indonesian rupiah was down 0.43%, Philippines peso 0.42%, Thai baht 0.16%, Malaysian ringgit 0.1%, China renminbi 0.09%. However, South Korean won was up 0.83%, Taiwan dollar 0.26%, Japanese yen 0.1%.

The US economy is doing well, with inflation now close to the Federal Reserve’s 2% target, said Fed’s chairwoman Janet Yellen at a town hall meeting. The central bank should begin discussing how to shrink its bloated balance sheet this year, according to three regional Fed presidents who stepped up pressure for a debate on when to unwind emergency-era measures that the Fed preferred to postpone, a Bloomberg report said.

India’s benchmark Sensex index closed at 27,238.06 points—down 0.03% or 9.10 from its previous close. So far this year, it has gained 2%.

India’s Index of Industrial Production (IIP) rose 5.7% in November, its fastest in 13 months, driven by a positive base effect. Data separately released by the statistics department showed retail inflation decelerated to a two-year low at 3.41% in December.

The 10-year bond yield on Friday hit near a two-week high despite the better than expected the index of industrial production (IIP) data as traders expect that this data has not assessed the impact of demonetisation. These are provisional numbers and they will get revised in the next month when the government will announce December’s IIP, which may show the actual impact of demonetisation.

The 10-year bond yield closed at 6.415%, compared to Thursday’s close of 6.373%. Bond yields and prices move in opposite directions.

So far this year, foreign institutional investors have sold $459.20 million in equity and bought $22.2 million in debt.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 101.17, down 0.18% from its previous close of 101.35