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Rupee hits three-month high against US dollar, breaches 67 mark,

by: Shiv Kumar Blogger

The Indian rupee on Thursday strengthened past the 67 mark to hit a fresh three-month high against the US dollar after foreign investors continued to buy in local equity and debt markets. This was the 11th out of 12 sessions when the rupee is trading higher.

Foreign institutional investors (FIIs) bought over $800 million in debt markets in the last eight trading sessions, while they bought $700 million in equity markets in the last two weeks. ` The local currency opened at 67.05 a dollar and touched a high of 66.95, a level last seen on 11 November 2016. At 9.17am, the home currency was trading at 66.96, up 0.32% from its previous close of 67.19. `
The Reserve Bank of India (RBI) on Wednesday signalled an unexpected early end to the two-year-old rate cut cycle, citing concerns of resurgent inflation, and left its key policy rate unchanged. ` ` RBI’s monetary policy committee (MPC), headed by governor Urjit Patel, decided unanimously to shift the policy stance from “accommodative” to “neutral” and left the repo rate at 6.25%. The government will issue Index of Industrial Production data on Friday. According to Bloomberg analysts’ poll, IIP will be at 1.4% in December from 5.7% a month ago. ` ` Bond yield gained eight out of nine trading sessions and hit a fresh three-month high. India’s 10-year bond yield was up at 6.802%, a level last seen on 7 November 2016, from its Wednesday’s close of 6.739%. Bond yields and prices move in opposite directions. ` ` India’s benchmark Sensex index rose 0.2% or 57.36 points to 28,347.28. So far this year, Sensex has risen 6.5%. ` ` Since the beginning of this year, the rupee has gained 1.3%, while FIIs have bought $175.30 million and $230.40 million from local equity and debt markets, respectively. ` Asian currencies were trading mixed. Taiwan dollar was up 0.21%, Indonesian rupiah 0.18% and South Korean won 0.12%. However, Japanese yen was down 0.24%, Malaysian ringgit 0.1%, China offshore 0.07% and China renminbi 0.07%. ` The dollar index, which measures the US currency’s strength against major currencies, was trading at 100.34, up 0.06% from its previous close of 100.28