The Indian rupee on Monday weakened against the dollar in afternoon trading, tracking losses in the Asian currencies market. At 2.17pm, the home currency was trading at 62.63, down 0.22% from the previous close of 62.42. The local unit opened at 62.59 per dollar.

“As long as the Middle East continues to be a little volatile, there will be some pressure on the Asian currencies as oil prices may change drastically. Moreover, as we are nearing the end of the financial year, traders will be cautious,” said Harihar Krishnamoorthy, treasurer, First Rand Bank.

On Sunday, Retuers reported that Arab leaders at a summit in Egypt announced the formation of a unified military force to counter growing security threats from Yemen to Libya, and as regional heavyweights Saudi Arabia and Iran engage in sectarian proxy wars.

Major Asian currencies were trading lower against the dollar. The Malaysian ringgit was down 0.87%, Japanese yen was down 0.54%, Singapore dollar was down 0.35%, Indonesian rupiah was down 0.15%, South Korean won was down 0.15%, Taiwan dollar was down 0.15%. The China renminbi was up 0.13%

As fiscal year is closing, the traders are cautious with the next week getting shortened with mere two market working days—30 March and 31 March. Bank transactions will not happen on 1 April due to annual closure of accounts while 2 and 3 April will be bank holidays for Mahavir Jayanti and Good Friday, respectively. To add to their woes, the markets will be closed on 4 and 5 April due to weekly holidays.

The Sensex equity index rose 1.55%, or 424.92 points, to 27,883.56 points. The yield on India’s 10-year benchmark bond was trading at 7.756% compared with its Friday’s close of 7.777%. Bond yields and prices move in opposite directions.

Since the beginning of this year, the rupee has gained 0.6%, while foreign institutional investors have bought $5.77 billion from local equity and $6.88 billion from bond markets.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 97.724, up 0.45% from the previous close of 97.291.

Source:livemint.com