Rupee opens flat against US dollar, bond yield rises

Mumbai: The Indian rupee was trading little changed against US dollar in opening trade on Wednesday, tracking mixed Asian currencies market.

The rupee opened at 64.08 a dollar. At 9.15am, the home currency was trading at 64.04 a dollar, down 0.01% from its Tuesday’s close of 64.04.

The 10-year bond yield opened marginally higher ahead of the sale of Rs14,000 crore of treasury bills. The government will offer Rs15,000 crore of bonds at a weekly sale on Friday.

Bond yield surged over 10 basis points on Tuesday after Reserve Bank of India (RBI) deputy governor Viral Acharya said that banks can’t continue to rely on the regulator to manage its interest-rate risks.

This comes on the back of a report by The Economic Times that public sector banks had sought the RBI’s approval to spread treasury losses in the December quarter over two quarters intended to limit their mark-to-market losses in their investment portfolios.

The 10-year bond yield was at 7.385%, compared to its previous close of 7.269%. Bond yields and prices move in opposite directions.

The benchmark Sensex rose 0.14%, or 48.07 points, to 34,819.12. So far in 2018, it has gained 2.5%.

So far this year, rupee weakened 0.27%, while foreign investors bought $278.70 million and $384.10 million in equities and bonds, respectively.

Asian currencies were trading mixed. China renminbi was up 0.21%, Malaysian ringgit 0.17%, China offshore 0.13%, Thai baht 0.1% and Taiwan dollar rose 0.07%. However, Philippines peso was down 0.35%, Japanese yen 0.21% and South Korean won fell 0.18%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 90.479, up 0.10% from its previous close of 90.393.livemint


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