Mumbai: The Indian rupee on Thursday closed stronger against the US dollar, as foreign institutional investors continued to buy in local equity markets.
The home currency closed at 66.71—up 0.18% from its previous close of 66.83. The local currency opened at 66.76 a dollar and touched a high and a low of 66.68 and 66.79, respectively.
Sensex index fell 0.5% or 144.70 points to 28,839.79. So far this year, it has risen 8.1%.
Ten-year-bond yield fell most in two months ahead of a coupon payment due on Monday. The 10-year bond yield closed at 6.845% compared to its Wednesday’s close of 6.928%. Bond yields and prices move in opposite directions.
So far this year, the rupee has gained 1.64%, while foreign institutional investors (FIIs) have bought $1.56 billion and $508.40 million from local equity and debt markets, respectively.
Most Asian currencies were trading lower after US Federal Reserve officials prompted gains in the dollar by signalling increased willingness to tighten monetary policy as early as March.
Japanese yen was down 0.46%, Philippines peso 0.14%, Singapore dollar 0.08%, China Offshore 0.07%, Malaysian ringgit 0.05%, China renminbi 0.04%. However, South Korean won was up 0.23%, Indonesian rupiah 0.05%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 101.98—up 0.2% from its previous close of 101.78.
Fed governor Lael Brainard painted a positive picture of economies at home and abroad that supported the case for an interest rate hike “soon” by the US central bank.
New York Fed president William Dudley, in an interview Tuesday on CNN International, said the case for tightening had become “a lot more compelling” in recent months.
His remarks followed comments from San Francisco Fed chief John Williams, who said he expects an interest rate increase will receive “serious consideration” at the 14-15 March meeting of the policymaking Federal Open Market Committee, Bloomberg reported.
