The local unit opened at 61.63 per dollar and touched a high and a low of 61.63 and 61.79, respectively. The currency ended at 61.74, down 0.03% from previous close of 61.72, while India’s equity benchmark Sensex closed at 28,177.88 points on BSE, up 0.17%.

“With the local markets performing well, all the cues for therupee were positive. But through the day we saw consistent dollar demand from importers. There might be slight import cover happening and even some commodity hedging,” said Harihar Krishnamoorthy, treasurer, FirstRand Bank.

India’s trade deficit in October narrowed to $13.4 billion as compared to $14.25 billion in September, government data showed on Monday. Merchandise imports up nearly 3.62% year-on-year to $39.50 billion mainly on account of lower oil imports even as gold imports surged. Exports, meanwhile, fell 5.04% on year to $26.1 billion.

Most of the Asian currencies ended higher. South Korean won was up 0.63%, Philippines peso 0.1%, Japanese yen rose 0.08%, Indonesian rupiah up 0.07%, China offshore 0.06%, Singapore dollar 0.05%.

Bond yields fell after both the CPI and WPI inflation fell which boosted the speculations that the Reserve Bank of India may cut the rates in its 2 December policy.

The yield on India’s 10-year benchmark bond ended at 8.183%, compared with its Friday’s close of 8.217%. Bond yields and prices move in opposite directions.

Data released on Friday showed the wholesale price index (WPI)-based inflation for the month of October was at 1.77%, the slowest pace since September 2009. A Bloomberg poll of 37 analysts had estimated that WPI inflation at 2.1% for October.

Data on Wednesday showed India’s index of industrial production (IIP) expanded by 2.5% in September after anaemic growth in the preceding two months and retail inflation moderated to 5.52% in October, compared with 6.46% in September, mainly on account of easing vegetable and fuel prices. A Bloomberg poll estimated consumer price index (CPI) at 5.67%.

Since the beginning of this year, the rupee has gained 0.12%, while foreign institutional investors have bought $15.20 billion during the period from local equity markets.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 87.647, up 0.14% from the previous close of 87.525.

Source: livemint.com