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Rupee weakens marginally against US dollar

LiveMint logoLiveMint 08-06-2017 Ravindra N. Sonavane

Mumbai: The Indian rupee on Thursday weakened marginally against the US dollar a day after Reserve Bank of India (RBI) kept key rates unchanged.

The rupee opened at 64.40 a dollar. At 9.15am, the rupee was trading at 64.38, down 0.08% from its Wednesday’s close of 64.33.

The 10-year bond yield was trading at 6.526% compared to its previous close of 6.567%. Bond yields and prices move in opposite directions.

The Reserve Bank of India’s (RBI) monetary policy committee (MPC) on Wednesday kept key interest rates unchanged, but cut inflation forecasts sharply. For the first half of fiscal year 2017-18 (April-September), CPI (consumer price index) inflation is now seen at 2.0-3.5% and for second half at 3.5-4.5%. This marks a revision from 4.5% and 5.0% estimated earlier, respectively. It cut statutory liquidity ratio by 50 basis points to 20%.

Analysts expect that the lowering of inflation projections indicates that there is still room for rate cut in the coming policy meetings.

The benchmark Sensex index rose 0.07% or 22.49 points to 31,293.77. So far this year, it has gained 17.14%.

So far this year, the rupee has gained 5.53%, while foreign investors bought $7.83 billion and $11.28 billion in local equity and debt markets, respectively.

Asian currencies were trading lower. Philippines peso was down 0.15%, South Korean won 0.12%, Malaysian ringgit 0.08% and Indonesian rupiah 0.06%. However, Singapore dollar was up 0.05%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 96.719, down 0.03% from its previous close of 96.748.

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