Rupee closes at over 2-month high against US dollar at 66.51

Mumbai: The Indian rupee closed stronger against the US dollar for the third consecutive session against the US dollar, supported by expectations that foreign portfolio investors (FPI) would continue to buy domestic equities.

The home currency closed at 66.51, a last level seen on 1 January, up 0.36%, from its previous close of 66.75. The currency had opened at 66.62 per dollar and touched a high of 66.50—a level last seen on 5 January. The rupee closed stronger for the third consecutive week and has gained 3.2% from 26 February till date.

Between 1 March and 17 March, FPIs bought $1.91 billion worth of shares due to which local stock indices gained 8.48%, or over 1,950 points.

India’s benchmark Sensex index rose 1.12%, or 275.37 points, to close at 24,952.74 points. However, the Sensex is down 4.45% since 1 January.

Since the beginning of this year, the rupee has lost 0.53%, while foreign institutional investors have sold $964.1 million from local equity and $1.17 billion in debt markets.

Meanwhile, the bond yield fell for the seventh consecutive session on hopes of a rate cut by the Reserve Bank of India in its next monetary policy, scheduled for 5 April. The bond yield fell for the third consecutive week and is down 26 basis points since 27 February till date.

India’s 10-year bond yield closed at 7.52%—a level last seen on 5 October 2015, as compared with its Thursday’s close of 7.522%.

Asian currencies closed lower. Singapore dollar was down 0.42%, Indonesian rupiah 0.32%, China offshore spot 0.22%, Thai baht 0.15%, Philippines peso 0.06%. However, South Korean won was up 1%, Taiwan dollar 0.67% and Malaysian ringgit 0.07%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.957, up 0.21% from its previous close of 94.76.