LM:Rupee remains weak at 61.36 a dollar in thin trade ahead of Diwali
Mumbai: The rupee remained weak against the US dollar as dealers awaited fresh global or local cues on Thursday.
At 2.40pm, the Indian rupee was trading at 61.36, down 0.21% from previous close of 61.2375 but little changed from its opening of 61.3775 per dollar. It has earlier touched a low of 61.46 per dollar.
“The rupee is stuck in the broad Rs.61 to Rs.62 per dollar as there are no fresh reasons to buy or sell the Indian currency. Unless there is some announcement by the Reserve Bank to bring back a part of the dollar demand from oil companies into the market or to close the FCNR (B) (foreign currency non-resident bank deposits) window, trade is likely to be thin,” said a dealer with a private bank.
The Reserve Bank of India (RBI) had announced a special swap window for oil companies in August to support a free falling rupee. Later in September the central bank had announced that foreign currency deposits by banks will be given a subsidy at 3.5%, to attract more inflows into India. RBI has collected a total of $12.1 billion through this window, governor Raghuram Rajan said in a post monetary policy interaction earlier this month.
Both these measures have had a positive impact on the rupee. The rupee was once the biggest loser in Asia but has since risen to be the third biggest loser.
Since January this year, the rupee has weakened 10.41% and has lost the third most after Indonesian rupiah and Japanese yen among Asian currencies during that period.
“Market talk is that RBI has set a $20 billion target to attract FCNR (B) deposits and we expect this window to be opened right up till RBI-prescribed date of 30 November,” said the dealer with the private bank.
Traders are also reluctant to take dollar positions ahead of the Diwali weekend from Saturday. The markets are shut on Monday for the Diwali festival.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 79.77, down 0.01% from the previous close of 79.77.
India’s benchmark Sensex was trading at 21022.82, down 0.05% or 11.15 points from the previous close.
The yield on the 10-year benchmark bond was trading at 8.605%, up 3 basis points from the previous close of 8.574%. It opened at 8.584% and touched a high and a low of 8.621% and 8.577%, respectively.
Overnight call money rate was trading at 8.8%, up 1 basis point from the previous close of 8.7%.
