Rupee strengthens against the US dollar for third session

Rupee strengthens

The Indian rupee strengthened for the third session on Friday, while bond yield fell for the fourth consecutive session against the US dollar in opening trade, ahead of the key Reserve Bank of India’s (RBI) bi-monthly policy next week.

The rupee opened at 64.36 a dollar. It was trading at 64.37, up 0.17%from its Thursday’s close of 64.48.

The 10-year bond yield was trading at 6.623% compared to its previous close of 6.625%. Bond yields and prices move in opposite directions.

RBI will meet for its policy on 6-7 June. Analysts said that slower economic growth may put pressure on RBI to cut policy rates to balance its inflation-targeting focus with the need to stimulate economic growth.

The government said on Wednesday that gross domestic product (GDP) growth slowed to 6.1% in the fiscal fourth quarter from 7% in the third. Real gross value added (GVA), another measure of economic activity that is arrived at by excluding net indirect taxes from GDP, slowed to a growth pace of 5.6% in the March quarter, also the fourth consecutive quarterly decline.

The benchmark Sensex index rose 0.15% or 48.24 points to 31,185.83. So far this year, it has gained 17%.

So far this year, the rupee has gained 5.29%, while foreign investors bought $7.72 billion and $10.52 billion in local equity and debt markets, respectively.

Asian currencies were trading mixed. South Korean won was up 0.16%, Malaysian ringgit 0.15%, Philippines peso 0.05% and Taiwan dollar 0.04%. However, China offshore spot was down 0.58%, Japanese yen 0.23%, Thai baht 0.23% and China renminbi 0.08%.

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