On Wednesday, the RBI raised policy rates by 25 basis points to 6.5% amid inflationary pressures. Photo: Mint
Mumbai: Indian rupee on Thursday weakened along with Asian currencies against US dollar on fresh concerns of trade war between US and China.
The rupee ended at 68.71 a dollar, down 0.4% from its previous close of 68.43. The currency opened at 68.39 a dollar and touched a high and a low of 68.27 and 68.72 respectively.
Reserve Bank of India’s concerns over ongoing trade war that might escalate currency war also dampened the sentiment. Earlier on Wednesday, RBI governor said “Few months of turbulence are now behind us. It looks like this is likely to continue. Trade skirmishes evolved into tariff wars. We are possibly at the beginning of a currency war”
Most Asian currencies declined after the Trump administration said it’s weighing whether to increase the proposed tariff on $200 billion of Chinese goods to 25% from 10%. The duties could be implemented as early as next month.
Among Asian currencies, China Offshore was down 0.47%, China Offshore 0.47%, Thai Baht 0.38%, Singapore dollar 0.34%, Indonesian rupiah 0.26%, Malaysian ringgit 0.25%, China renminbi 0.24%, Taiwan dollar 0.21%, Philippines peso 0.14%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.708, up 0.05% from its previous close of 94.661.
Benchmark Sensex Index fell 0.95% or 356.46 points to 37,165.16. Since January, it has gained 9.5%.
The 10-year bond yield closed at 7.721%, from its Wednesday’s close of 7.701%. Bond yields and prices move in opposite directions.
So far this year, the rupee has weakened 7%, while foreign investors have sold $413.60 million and $6 billion in equity and debt markets, respectively.
(Bloomberg contributed this story)