Mumbai, India (BBN) – The Indian rupee hit a nearly 1-1/2 year high against the dollar on Monday, tracking gains in Asian currencies after US President Donald Trump’s failure to pass a healthcare reform bill raised concerns about the chances of a US fiscal stimulus.
The Reserve Bank of India stepped in to cap broader gains in the rupee, traders said, adding that some of the gains were also due to the strong $6.1-billion foreign investment into debt and equities this month, reports The Hindu Business Line.
The gains in the local unit spurred by strong dollar inflows helped spark a rally in bond markets, sending the benchmark 10-year bond yield down as much as 12 basis points to 6.71 per cent, the lowest since February 8 when the central bank unexpectedly changed its monetary policy stance to “neutral” from “accommodative.”
At 2.55 pm, the rupee was trading at 65.07 after earlier strengthening to as much as 65.04 per dollar, the strongest level since October 2015.
The dollar slid to a near two-month low against a basket of currencies on Monday as concerns mounted about the chances of US fiscal stimulus after President Donald Trump’s failure to push through a healthcare reform Bill.
Dragged down by declining US yields, the dollar index against a basket of major currencies was down 0.4 per cent at 99.258, its lowest since February 2.
Meanwhile, the benchmark Sensex was trading lower by 168.28 points or 0.57 per cent at 29,253.12.