Rupee weakens against dollar despite new govt measures to stem fall

Rupee weakens against dollar despite new govt measures to stem fall

Mumbai: The Indian rupee on Monday weakened against the US dollar, tracking the losses from Asian currency market, even as the government announced several measures to defend the currency. At 2pm, the rupee was trading at 72.48 a dollar, down 0.87% from its previous close of 71.86. The currency opened at 72.49 a dollar, touching a high 72.41 and a low 72.69. The 10-year bond yield stood at 8.141%, from its Friday’s close of 8.127%. Bond yields and prices move in opposite directions.

Finance minister Arun Jaitley on Friday night announced a series of measures to boost market confidence, curb the widening current account deficit and stabilize the rupee after a marathon meeting with Prime Minister Narendra Modi to discuss the nation’s economy.

Rupee weakens against dollar despite new govt measures to stem fall

Upasna Bhardwaj, an economist with Kotak Mahindra Bank Ltd expects more measures from the RBI in coming months. “We are expecting a 25 basis-point rate hike in October,” she added. RBI could also aggressively intervene in currency markets as well as open a swap window for oil marketing companies to help them meet dollar demand off-market, said Bhardwaj.

Benchmark Sensex Index 1.05% or 400.30 points to 37690.34 points in afternoon trade. Since January, it has gained 10.67%.

So far this year, rupee has weakened 11.89%, worst performer among Asian currencies. while foreign investors have sold $939.15 million and $8.79 billion in equity and debt markets, respectively.

Asian currencies were trading lower. South Korean won lost 0.883%, Indonesian rupiah 0.524%, Philippine peso 0.386%, Taiwan dollar 0.218% and China renminbi 0.033%. However, Thai baht gained 0.159%, Japanese yen 0.071%, Singapore dollar 0.036%, China offshore 0.010% and Hong Kong dollar 0.008%

The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.772, down 0.16% from its previous close of 94.927.

source: livemint