Mumbai: The rupee was trading weak against the US dollar in thin trade ahead of Reserve Bank of India’s (RBI) mid-quarter policy review on Wednesday. Trade was thin as dealers avoided taking fresh dollar positions ahead of RBI policy and also as many bankers were on leave for Christmas holidays. At 2.40pm, rupee was trading at 61.8675, down 0.19% from previous close of 61.75. It had opened at 61.755. Dealers had covered their dollar positions earlier in the day after foreign banks sold the US currency likely on behalf of their clients on Monday, lifting the rupee to 61.75 per dollar, up 0.61% from its Friday’s close. Dealers said the sales could be linked to a pharmaceutical company. “Nothing is happening because people are awaiting the RBI policy. Trade is likely to be thin anyway because even a rate hike by RBI is being discounted. We are already into the end of year mode,� said Ashish Vaidya, head fixed income, currency and commodities trading at UBS AG. Besides the RBI policy, traders are also awaiting cues from the US Federal Reserve’s two-day meeting which ends later on Wednesday. Expectations are that the Fed will give clues to taper its $85 billion a month bond buying programme. Since January this year, the rupee has weakened 11.11% and has lost the third most after Indonesian rupiah and Japanese yen among Asian currencies during that period. The dollar index, which measures the US currency’s strength against major currencies, was trading at 80.025, down 0.06% from its previous close of 80.074. The yield on India’s 10-year benchmark bond was trading at 8.87%, compared with its Monday’s close of 8.86%. India’s equity benchmark BSE Sensex was trading at 20,651.25 points, down 0.04%.

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