Rupee closes at two-week high against US dollar
Mumbai: The rupee on Wednesday pared all the losses and hit a two-week high against US dollar. This was the third session when it closed higher.
The local currency closed at 64.84 a dollar, up 0.08% from its previous close of 64.90. The home currency opened at 64.88 a dollar and touched a high and a low of 64.83 and 65.05, respectively.
Earlier in the day, the rupee and local equity stocks fell after the Reserve Bank of India (RBI) on late Tuesday barred banks from issuing letters of undertaking (LoUs) and letters of comfort with immediate effect. .
Both the instruments, used by importers to fund overseas purchases, came under the scanner after jewellers Nirav Modi and Mehul Choksi fraudulently obtained such credit guarantees from state-run Punjab National Bank to avail overseas loans.
Year to date, the rupee has weakened 1.6%, while foreign investors have bought $631.60 million in equity and sold $11 million in debt markets.
Yields on 10-year government bonds ended at 7.685% compared to Monday’s close of 7.653%. Bond yields and prices move in opposite directions.
India’s benchmark Sensex index fell 0.06%, or 21.04 points, to 33,835.74. So far this year, Sensex has fallen 0.5%.
Asian currencies were trading higher as US inflation data in line with estimates reassured investors the Federal Reserve won’t accelerate its tightening path.
Thai baht was up 0.41%, China offshore 0.36%, South Korean won 0.26%, Singapore dollar 0.2%, Japanese yen 0.14%, Indonesian rupiah 0.13%, China renminbi 0.11%, Taiwan dollar 0.1%. However, Malaysian ringgit was down 0.22%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 89.746, up 0.09% from its previous close of 89.664.