Rupee closes over six month low on wider trade deficit

Yields on the 10-year government bond stood at 7.438% from its previous close of 7.425%. Photo: HT

Yields on the 10-year government bond stood at 7.438% from its previous close of 7.425%. Photo: HT

Mumbai: The Indian rupee on Monday closed over six month low against the US dollar as nation’s trade deficit widened more than estimated in March.

The home currency closed at 65.49 against US dollar—a level last seen on 3 October 2017, down 0.41% from Friday’s close of 65.22. The rupee opened at 65.34 a dollar and touched a low of 65.51 a dollar.

India’s trade deficit came in at $13.7 billion in March, climbing from $11.98 billion in February and more than the $12.3 billion deficit median estimate of 25 economists surveyed by Bloomberg. Exports in March fell 0.7%, while imports rose 7.2% from a year ago.

Also the US Treasury Department said that it would be adding India to the list of countries that it considers as potential currency manipulators dampened the sentiment.

“Inclusion of India on the US’s FX monitoring list may mean Indian authorities will feel more pressure not to intervene against INR appreciation when it emerges”, Bloomberg reported, quoting Craig Chan, global head of emerging-market FX strategy at Nomura.

Benchmark Sensex Index rose 0.33%, or 112.78 points, to 34,305.43. Year to date, it’s down 0.1%.

Yields on the 10-year government bond ended at 7.483% from its previous close of 7.425%. Bond yields and prices move in opposite directions.

So far this year, the rupee has fallen 2.47%, while foreign investors have bought $2 billion and $531.40 million in equity and debt markets, respectively.

First Published: Mon, Apr 16 2018. 09 17 AM IST

Source: livemint