Date: |
08-12-2016
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Subject: |
Rupee falls marginally against US dollar as RBI leaves rates unchanged
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Mumbai: The Indian rupee on Wednesday erased all the gains and was trading marginally lower against the US dollar, after the Reserve Bank of India (RBI) kept policy rate unchanged.
At 2.33pm, the rupee was trading at 67.94 per US dollar, down 0.06% from its previous close of 67.90. The home currency opened at 67.82 against the US dollar and touched a high of 67.78, a level last seen on 17 November. So far this year, it has fallen 2.7%.
The RBI kept interest rates unchanged before a possible increase in US borrowing costs this month, as governor Urjit Patel awaits clarity on the impact of the cash clampdown. The RBI governor and deputy governors will hold a press meet at 2.45pm and will speak to analysts at 4.30pm.
According to a Mint survey, the RBI was expected to cut interest rates by 25 basis points (bps) to boost growth as the government’s unexpected withdrawal of high-value banknotes is likely to hurt consumption. A basis point is one-hundredth of a percentage point.
India’s benchmark Sensex index was trading at 26,306.18 points, down 0.34% or 74.27 points from its previous close. So far this year, it has risen 1.1%. The benchmark 10-year government bond yield was trading at 6.324%, compared to Tuesday’s close of 6.203%. Bond yields and prices move in opposite directions.
So far this year, foreign institutional investors have bought $4.04 billion in equities and sold $5.28 billion in debt. Most Asian emerging market currencies weakened as dollar strengthened, while shares rose on optimism that the European Central Bank (ECB) will continue its bond-buying program.
China offshore spot was down 0.2%, Philippines peso 0.13%, Singapore dollar 0.13%, China renminbi 0.11%, Thai baht 0.1% and Malaysian ringgit 0.05%. However, Indonesian rupiah was up 0.26%, South Korean won 0.25% and Taiwan dollar rose 0.12%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 100.51, up 0.02% from its previous close of 100.49.
Sources :www.livemint.com