Rupee remains range-bound as PSU banks buy dollars sold by foreign banks

Mumbai: The rupee was stuck in a narrow range on Monday as dollars sold by foreign banks likely on behalf of their clients were absorbed by public sector banks. After opening at 60.05 per dollar, the Indian currency was trading 60.07, up just 0.03% from Friday’s close of 60.09. It has moved in the 59.99-60.12 range on Monday. “There are inflows in the market, but the rupee has not been allowed to move much because public sector banks are buying dollars. We are not sure of what their intention is because they have been buying since the last one week,” said a dealer with a private bank. Besides the local spot market dollar demand from public sector banks was also seen in the non-deliverable forward market, according to data from Bloomberg, which pushed the dollar higher in that market as well. As a result, the one-month forward dollar rupee was trading at 60.38, up 0.15% from Friday’s close, while three-month forward was trading at 60.97, up 0.23%. Six-month non-deliverable forward was at 61.95, up 0.10% from Friday’s close. However, dollar inflows from foreign institutional investors (FIIs) continued in the equity market. Benchmark 30-share S&P BSE Sensex was trading at 25,371.79 points on BSE, up 1.08%. Since the beginning of this year, the rupee has gained 2.88% against the dollar, while FIIs have bought $9.88 billion from local equity markets. The yield on India’s 10-year benchmark bond was at 8.717%, compared with its Friday’s close of 8.745%. Bond yields and prices move in opposite directions. The dollar index, which measures the US currency’s strength against major currencies, was trading at 80.021, down 0.02% from its the previous close of 80.039.

COURTESY :-LIVEMINT.COM