LM:Rupee weakens to 62.27 on dollar buying by PSUs
Mumbai: The rupee weakened in afternoon trade on Thursday on dollar buying by public sector units (PSUs) on behalf of their oil marketing clients.
At 2pm, the domestic currency was trading at 62.27 per dollar, down 0.26% from the previous close of 62.11. The unit had opened at 62.01 per dollar, but fell to a low of 62.335 on heavy demand for the greenback.
The rupee had opened stronger in the morning, tracking lower inflation numbers released on Wednesday.
Retail inflation based on the Consumer Price Index (CPI), a key indicator now targeted by the Reserve Bank of India (RBI), slowed to 8.79% in January from 9.87% in December mainly on account of easing prices of vegetables.
However, industrial output fell 0.6% in December from a year earlier, after contracting 1.3% in the preceding month, according to data from the statistics ministry. Analysts polled by Reuters had forecast a contraction of 1% in industrial output.
Currency dealers say RBI is maintaining a price band and sporadically intervening in the currency market to maintain it within the targeted range.
“RBI is not letting rupee fluctuate much. They are keeping rupee stable between 61.50 and 63.50 a dollar,” said Satyajit Kanjilal, managing director at Forexserve, a currency consultant.
The yield on India’s 10-year benchmark bond was trading at 8.817%, flat compared with its Wednesday’s close of 8.811%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 80.482, down 0.24% from the previous close of 80.679.
India’s benchmark equity index, Sensex on BSE was trading at 20,274.8 points, down 0.85%, from the previous close.
