The Indian rupee on Friday weakened past the 67 mark, to hit a three-week low, against the US dollar as traders expect that the Reserve Bank of India (RBI) may delay cutting interest rates after recent higher inflation data. Traders also remained cautious ahead of the announcement of a new governor for the RBI expected anytime now.

At 1.30pm, the home currency was trading at 67.03 a dollar, down 0.30% from its previous close of 66.81. The rupee opened at 66.96 a dollar and touched a low of 67.03, a level last seen on 29 July.

India’s wholesale price inflation shot up to 3.55% in July from 1.62% a month ago on the back of rising prices of food and non-food articles, while consumer price inflation was at 6.07% in July from 5.77% in June on the back of rising food prices.

The 10-year bond yield was trading at 7.137%, compared with its Thursday’s close of 7.143%. Bond yields and prices move in opposite directions.

India’s benchmark Sensex index fell 0.22% or 61.75 points to 28,061.69. So far this year, it has gained 7.5%.

The rupee is down 1.3% till date this year, while foreign institutional investors (FIIs) have bought $5.73 billion in equity and sold $1.14 billion in debt markets.

Asian currencies were trading lower. South Korean won was down 0.92%, Taiwan dollar 0.8%, Malaysian ringgit 0.5%, Singapore dollar 0.46%, Philippines peso 0.41%, Indonesian rupiah 0.33%, China offshore 0.29%, Japanese yen 0.26% and Thai baht 0.28%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.438, up 0.29% from its previous close of 94.157.

Minutes of the US Federal Reserve’s last meeting struck a more dovish tone than earlier comments by New York Fed president William Dudley, who had flagged the possibility of borrowing costs being increased as soon as next month. US officials have twice cut projections for their rate hike path as economic weakness and volatile financial markets undermine the case for policy to be tightened, Bloomberg reported.

Sources :livemint.com