The Indian rupee on Monday weakened against the US dollar on concerns that the delay of monsoon and weak macroeconomic data could dampen the prospects of further rate cuts by the Reserve Bank of India (RBI). This was the eighth out of 11 trading sessions when the rupee was trading lower.
At 9.17am, the home currency was trading at 66.86, down 0.18% from its previous close of 66.77. The rupee opened at 66.89 a dollar and touched a low of 66.92, a level last seen on 23 March.
The monsoon is expected to arrive in Kerala on 7 June, six days later than normal, the India Meteorological Department (IMD) said on Sunday.
On 12 May, the government released the Index of Industrial Production (IIP) data, which rose 0.1% in March. Retail inflation accelerated to 5.39% in April from 4.83% in March, as food inflation quickened to 6.32% from 5.21% the previous month.
The government will issue wholesale price inflation (WPI) data on 16 May after 12pm. According to Bloomberganalysts, WPI will be at -0.2% for April against -0.85% in March.
India’s benchmark Sensex index rose 0.28% or 71.65 points to 25,561.22. So far this year, Sensex is down 2.5%.
India’s 10-year bond yield was trading at 7.453%, as compared with its Friday’s close of 7.449%.
Asian currencies were trading mixed. South Korean won was down 0.52%, Japanese yen 0.29%, Malaysian ringgit 0.18% and Taiwan dollar 0.16%. However, Philippines peso was up 0.16%, Thai baht 0.1%, China offshore 0.09% and China renminbi 0.08%.
So far this year, the rupee has weakened 0.93%, while foreign institutional investors have bought $1.77 billion from the local equity market and sold $177 million in debt markets.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.651, up 0.05% from its previous close of 94.608.
A plunge in the imports of oil and gold has trimmed India’s trade deficit to its lowest level in more than five years, bolstering the outlook for the country’s balance of payments.
The trade shortfall narrowed for the fourth straight month in April to $4.84 billion, its lowest level since March 2011, from $5.07 billion in the previous month, imports fell 23.1% to $25.4 billion and exports fell 6.74% to $20.56 billion in April, government data showed on Friday.