Mumbai: The rupee was little changed against the dollar in thin trade on Tuesday as mild demand from importers was met by some dollar sales by exporters.
At 1.20pm, the Indian currency was trading at 61.54 per dollar, unchanged from its previous close. The Indian currency had earlier opened higher at 61.28 per dollar, but trended lower to 61.73 on dollar demand. Dollar sales by exporters at those levels, however, ensured the rupee recouped most of its losses.
“The markets have generally become stable in the last one week. Dollar demand and supply has almost been matched,” said a dealer with a French bank.
Indian currency dealers are also keeping an eye on the drama over the US’s $16.7 trillion debt cap. US politicians are yet to agree on raising the crucial debt ceiling which expires on Thursday.
Increase in the debt ceiling is important for the US government to be able to continue to pay for its expenses. Failure to increase the limit could lead to a possible US default which may then have a detrimental impact on the global economy.
“We are expecting a deal among the US politicians only on the last day. Until then dealers here are watching the situation,” said the dealer with the French bank.
Since January this year, the rupee has weakened 10.63% and has lost the second most after the Japanese yen among Asian currencies during the period.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 80.302, up 0.05% from the previous close of 80.263.
India’s benchmark Sensex was trading at 20,638.94, up 0.15% or 31.40 points from the previous close.
The 10-year bond yield was trading at 8.65%, up 8 basis points from previous close of 8.57%. It opened at 8.575% and touched a high and a low of 8.676% and 8.575% respectively.
The overnight call money rate was at 9.05%, up 1.12% or 10 basis points from previous close of 8.95%. It had earlier touched a high and a low of 9.10% and 8.95% respectively.
