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| Rupee slides most in three months, dips 1.3% | | MONEY MARKET ROUND-UP |
| Bloomberg / Mumbai May 27, 2009, 00:35 IST |
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The rupee dropped the most in almost three months as North Korean missile and nuclear tests fuelled tension in Asia, spurring concern that foreigners will pare holdings of regional stocks.
 The rupee slid for a second day, weakening by 1.3 per cent to 47.9275 a dollar at the close, following its biggest weekly gain in 13 years, as a technical indicator signaled the currency would depreciate.
It also weakened on speculation that local companies are taking advantage of recent gains to settle month-end import payments, said Roy Paul, assistant manager of treasury at Federal Bank in Mumbai. The Bombay Stock Exchange Sensitive Index dropped the most in a month, tracking losses elsewhere in Asia.
The currency jumped 4.9 per cent last week and touched 46.99 on May 22, the strongest level since December 19. The dollar-rupee’s 14-day relative strength index, a technical gauge derived by averaging daily gains and losses, was 25 at the end of last week and 28 at yesterday’s close. A reading below 30 indicates to some investors the greenback is likely to rally.
Bond yields at 6-week high
The 10-year bond yields were at a six-week high after an official at the finance ministry said the government may borrow more than planned in June for a second month.
Benchmark notes due in 2019 erased the day’s gains on concern that increasing supply of debt will dampen demand for existing securities and push borrowing costs higher. The yield on the 6.05 per cent note due February 2019 was little changed at 6.56 per cent at the close of trade in Mumbai, according to the central bank’s trading system. The price was at 96.40 per 100-rupee face amount.
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