BackRupee closes marginally down at 60.53 per dollar; RBI intervention suspected
The home currency opened at 60.51 per dollar and strengthened to 60.43 in intra-day trade
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Mumbai: The Indian rupee erased the day’s gain to close marginally lower on Monday on suspected dollar buying from the Reserve Bank of India (RBI), said currency dealers.
Currency dealers say that the central bank of the country is buying dollars at every opportunity when the domestic currency is strengthening whereas other Asian currencies are not.
The home currency ended at 60.53 a dollar, marginally down from its Thursday’s close of 60.52. The local unit had opened at 60.51 per dollar and strengthened to 60.43 per dollar in afternoon trades.
Markets were closed for Ganesh Chaturthi on Friday.
“We expect the rupee to remain in the range of 60.20-60.70. Appreciation towards 60.20 will attract buying from local banks and importers, whereas any depreciation towards 60.70/dollar will see exporter selling," said Suresh Nair, Director, Admisi Forex India Pvt Ltd.
BSE’s equity benchmark S&P BSE Sensex ended at 26,867.55 points, up 0.86%. In intra-day trade, the Sensex touched an all-time high of 26,900.30, while the National Stock Exchange’s broader 50-share Nifty hit a high of 8,035 points.
Asian currencies showed a mixed trend. The Philippines peso was up 0.26%, South Korean won gained 0.07% Taiwan dollar was up 0.06% and China Offshore rose 0.06%, while Indonesian rupiah fell 0.22%, Japanese Yen down 0.16%,Thai baht slipped 0.13% and Malaysian Ringgit down 0.12%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 82.729, down 0.03% from the previous close of 82.748.
Since the beginning of this year, the rupee has gained 2.1%, while foreign institutional investors have bought $12.99 billion from local equity markets.
The yield on India’s 10-year benchmark bond ended at 8.552%, compared with its Thursday’s close of 8.563%. Bond yields and prices move in opposite directions.
On Friday, the government released gross domestic product (GDP) as well as fiscal deficit data. GDP grew at 5.7% in the June quarter—the fastest in more than two years and better than the 4.6% increase in the preceding quarter. The GDP data was driven by strong industrial recovery. Manufacturing activity grew 3.5%, while construction advanced 4.8%—the first clear signs that the Indian economy is on a recovery track.
According to the data released by the Controller General of Accounts on Friday, fiscal deficit for the April-July period stood at ₹ 3.25 trillion, 61.2% of the full-year budget estimate of ₹ 5.31 trillion. The fiscal deficit—total receipts over total expenditure—was 62.8% of the budget estimate during the same period in the previous financial year.
The HSBC Manufacturing Purchasing Managers’ Index (PMI), compiled by Markit, fell to 52.4 in August from 53 in July, but chalked up its tenth month above the 50 mark that divides growth from contraction. The Manufacturing PMI had increased to 53 in July, from 51.50 in June.
A monthly meeting of the European Central Bank (ECB) is scheduled for 4 September, and there are expectations that the ECB will announce quantitative easing in the coming months to strengthen growth in the euro zone, which may boost market sentiment.
Anup Roy contributed to this story.
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