The Indian rupee logged a modest decline on Monday, pressured by dollar bids from foreign and local private banks, though broad-based weakness in the greenback helped the local currency limit further losses.
The Indian rupee logged a modest decline on Monday, pressured by dollar bids from foreign and local private banks, though broad-based weakness in the greenback helped the local currency limit further losses.
Asian currencies were flat-to-slightly higher, while the dollar index declined by nearly 0.2% to 98.2.
The Indian rupee and the Indonesian rupiah are among the few regional currencies nursing losses on the year so far, even as their peers, such as the Taiwan dollar and the Korean won, have climbed over 11% and 6%, respective
Muted portfolio flows, India's external investment deficit and likely FX reserve accumulation by the Reserve Bank of India are among the reasons cited by analysts for rupee's lacklustre performance this year.
On the day, price action appeared to indicate modest outflows but dollar-buying pressure eased in the latter half of the session, helping the rupee trim its losses, a trader at a private bank said.
India's benchmark equity indexes, the BSE Sensex and Nifty 50, closed higher by about 0.5% each on the day, while the benchmark 10-year bond yield was last quoted slightly lower at 6.2986%.
India's benchmark equity indexes, the BSE Sensex and Nifty 50, closed higher by about 0.5% each on the day, while the benchmark 10-year bond yield was last quoted slightly lower at 6.2986%.
In the near term, focus will be on developments on two fronts: how U.S. economic data impact expectations of rate cuts and news surrounding U.S.-India trade negotiations ahead of the August 1 deadline for higher U.S. tariffs to take effect.
"We maintain our view that slower growth, profit margin compression and export price reduction will contain the impact of tariffs, and that a slower economy will justify the Fed resuming rate cuts in September," ANZ said in a Monday note.
Source Name : Economic Times