Rupee Slips To Near 3-Month Low As Traders Await GDP Data
The Indian rupee fell for a third straight session to a nearly three-month low against the U.S. dollar on Wednesday.
The home currency edged down 22 paise to 65.10 a dollar at the open today amid increased demand from banks and importers. It has depreciated over 2.4 percent so far this month.
The dollar was buoyed by a statement from Federal Reserve Chairman Jerome Powell that signaled U.S. policymakers will keep on gradually raising interest rates, undeterred by recent market fluctuations.
Government data due to be released later in the day is likely to show a pick up in gross value added growth to 6.7 percent in the third quarter of the current fiscal, according to a Bloomberg survey. This compares to 6.1 percent growth in the second quarter and 6.7 percent in the year-ago quarter.
Gross domestic product growth is seeing rising to 7 percent compared to 6.3 percent in the second quarter. GVA has become a preferred measure of economic growth as it strips out the impact of indirect taxes and subsidies.
“The worsening trade deficit on the back of higher oil prices, the recent bank scandal that has resulted in foreign equity outflows and news that the RBI is looking to tighten offshore borrowing have conspired to weaken the rupee, from what had been overvalued levels,” said Khoon Goh, head of research at Australia and New Zealand Banking Group Ltd. in Singapore.
Sovereign bonds are set for a seventh monthly decline, the longest losing stretch in two decades. The yield on 7.17 percent bonds due Jan. 2028 has risen 24 basis points in this month amid concerns of the central bank turning hawkish on the back on quickening inflation, rising oil prices and wider fiscal deficit.