Rupee trades lower at 67.22 against US dollar

Mumbai: The Indian rupee on Tuesday weakened against the US dollar following cues from its Asian peers ahead of the start of the US Federal Reserve’s two-day meeting.

At 9.10am, the home currency was trading at 67.22, down 0.17% from its previous close of 67.11. The rupee opened at 67.22.

Asian currencies were trading low. Malaysian ringgit was down 0.4%, South Korean won 0.34%, Indonesian rupiah 0.26%, Philippines peso 0.19%, Singapore dollar 0.13%, China offshore spot 0.11%, China renminbi 0.1% and Taiwan dollar fell 0.08%.

Currency traders also keenly await the US Federal Reserve’s stance on key policy rates after its two-day policy meet scheduled for 15-16 March.

India’s benchmark Sensex index rose 0.1% or 25.54 points to 24,861.67. BSE’s Sensex rallied 8% this month, but is still down 5%, year-to-date.

10-year bond yield fell for the fourth consecutive session after India’s retail price inflation eased at a faster-than-expected pace to a four-month low in February, creating ideal conditions for the country’s central bank, if it is so inclined, to cut the policy rate at any time between now and a scheduled monetary policy review on 5 April.

Consumer price index-based (CPI-based) inflation softened to 5.18% in February from 5.69% a month ago, according to data released by the Central Statistics Office on Monday. India’s wholesale price index-based inflation rate contracted for the 16th straight month in February to 0.91%, driven down by low oil prices and softening vegetable prices.

India’s 10-year bond yield was at 7.573%, as compared with its Monday’s close of 7.599%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 96.58, down 0.05% from its previous close of 96.624.

Since the beginning of this year, the rupee has lost 1.7%, while foreign institutional investors have sold $1.39 billion from local equity and $1.4 billion in debt markets.