MUMBAI: The Indian rupee on Friday strengthened against the dollar, tracking gains in the local equity and Asian currencies market. The local unit opened at 62.15 per dollar and touched a high of 62.11. At 9.09am, the home currency was trading at 62.11, up 0.31% from previous close of 62.31.
The Index of Industrial Production (IIP), a measure of factory output, grew 1.7% in December compared with 3.9% a month ago, while a new series of retail inflation based on 2012 as the base year showed the consumer price index (CPI) quickened to 5.11% in January from 4.28% in December due to rising food prices.
The CPI data was lower than an estimated 5.50% in a survey of economists by Bloomberg. Dealers expect that given the current inflation is below the Reserve Bank of India’s 6% target, slowing Index of Industrial production will boost pressure on central bank to cut interest rates to boost growth. Major Asian currencies were trading higher against the dollar.
The South Korean won was up 1.16%, Taiwan dollar 0.3%, Malaysian ringgit 0.28%, Indonesian rupiah 0.28%, Philippines peso 0.19%, Japanese yen 0.14%. However, Singapore dollar was down 0.10%. Rising for the fourth consecutive session, the benchmark Sensex Index rose 0.10% or 85 points to 28,890 points.
The yield on India’s 10-year benchmark bond was trading at 7.701% compared with its Thursday’s close of 7.744%. Bond yields and prices move in opposite directions. Since the beginning of this year, the rupee has gained 1.50%, while foreign institutional investors have bought $2.47 billion from local equity and $4.46 billion from bond markets. The dollar index, which measures the US currency’s strength against major currencies, trading at 94.201, up 0.11% from the previous close of 94.094.
