Mumbai: The domestic currency slid back to 60 levels in the afternoon after strengthening to as much as 59.96 to a dollar in intra-day trade, the highest level since 9 April.
State-run banks were also seen stepping up demand for the greenback putting pressure on the local exchange rate. Still, the dollar demand has tapered off from what it was in the last few weeks.
At 3.07pm, the rupee stood at 60.08 per dollar, up 0.03% from it’s previous close of 60.10. The rupee touched a low of 60.12 per dollar in the intra-day trade.
Currency traders are wary of taking positions in the local currency as the general elections results are due in a week’s time. The trading volume has thinned this week.
According to a foreign exchange dealer with a bank, the Reserve Bank of India (RBI) is absent from the market but dollar demand from state-owned banks have lessened. The state-run banks were heavy buyers of dollars from the market on behalf of their clients.
Overall, the dollar also remained weak against a basket of major currencies till Tuesday but has started inching up. The dollar index, which measures the greenback’s strength against major global currencies, was trading at 79.109 from 79.093 on Tuesday.
BSE’s benchmark Sensex index fell 0.6% to 22,373.21 points.
Since the beginning of this year, the rupee has gained 2.92% as foreign institutional investors (FIIs) have bought $5.43 billion from local equity markets.
The yield on India’s 10-year benchmark bond trades at 8.771%, compared with its Monday’s close of 8.736%. Bond yields and prices move in opposite directions.
