Rupee weakens to 28-month low of 67.20 per US dollar

Mumbai: The Indian rupee recovered marginally in mid-day trade after weakening to a 28-month low against the US dollar, as some exporters sold dollars.

At 2.10pm, the rupee was trading at 67.14 per dollar, down 0.42% from its previous close of 66.85. The local currency had hit a low of 67.20 —a level last seen on 4 September 2013—after opening the session at 67.05 a dollar.

“Given the global conditions, the rupee is biased to weaken more. I think in the very short term, 67.50 per US dollar could be a level where we would see the next support for the rupee,” said Ashutosh Raina, head of forex trading at HDFC Bank.

India’s wholesale prices fell for a 14th straight month in December, declining an annual 0.73%, driven down by tumbling oil prices, government data showed on Thursday.

India’s benchmark equity index, BSE Sensex, was trading at 24,891.04 points, up 0.15%, or 36.93 points. Since 1 January, the Sensex has fallen 4.6% or 1,212 points.

Asian currencies were trading lower. South Korean won was down 0.77%, Philippines peso 0.63%, China offshore 0.62%, Indonesian rupiah 0.44%, Malaysian ringgit 0.3%, China renminbi 0.2%, Japanese yen 0.18%, Singapore dollar 0.17%, Hong Kong dollar 0.11% and Thai baht 0.09%.

The yield on India’s current 10-year benchmark bond stood at 7.763% compared with its Wednesday’s close of 7.767%. Bond yields and prices move in opposite directions.

Since 1 April, the Sensex is down over 12%, while foreign institutional investors have sold $3.28 billion from local equity markets and bought $1.08 billion from the debt market.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 98.993, up 0.06% from its previous close of 98.815.