LM:Rupee strengthens 13 paise against dollar to 61.93
Mumbai: The Indian rupee strengthened in the intra-day trading on Tuesday, backed by an optimism that the economic growth may accelerate if a stable government is formed after the general elections.
The rupee has been in a range of 61.8-63.2 against the dollar in the recent past and might strengthen further if overall economic sentiment improves, money markets experts said.
“The rupee should hold a range of 61 to 63 going ahead,” said Aman Mahna, forex dealer at FirstRand Bank Ltd. “There is an expectation in the financial markets that there will be some political stability post elections. That is helping the currency,” Mahna said.
“There is an optimism that there will be some political stability at the centre going ahead, critical for investor confidence that is aiding the foreign fund inflows,” said Satyajit Kanjilal, managing director at Forexserve.
At 3.15pm, the local unit was trading at 61.93, up 0.22% from its previous close of 62.06. The local currency opened at 61.98 per dollar.
So far this year, the rupee has lost 0.21% against the dollar when foreign institutional investors bought $93.2 million of local equities. Last week, the rupee fell 0.4% against the dollar.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 80.117, down 0.1% from the previous close of 80.199.
The yield on India’s 10-year benchmark bond climbed to the highest level in almost two months in the intra-day trading as Reserve Bank of India (RBI) governor warned that inflation remains the biggest threat to economic growth.
Reining in price gains is RBI’s top challenge, Raghuram Rajan, who has raised borrowing costs three times since taking office in September, said in a 23 February interview in Sydney.
Any action will depend on data, he added. Wholesale prices rose 5.05% in January from a year earlier, the least since May, and the Consumer-Price Index increased 8.79%, the smallest gain in two years.
The yield on India’s 10-year benchmark bond was trading at 8.887%, compared with its Monday’s close of 8.885%. Bond yields and prices move in opposite directions. In the intra-day trade the 10-year yield rose to 8.914%.
India’s equity benchmark index, S&P BSE Sensex, was trading at 20,845.52 points, up 0.16%.
