Rupee falls after sources say plan to join global debt index on hold

Reuters Market Eye - The rupee fell marginally on the day at 60.87/88 versus its close of 60.85/86 after government sources say the country has put plans for inclusion in a global bond index on hold.

India has put on ice plans to join major emerging market bond indexes that would require it to remove restrictions on foreign capital inflows, two sources said, signalling easing concerns about the rupee and the balance of payments.

Traders say they were hoping the inclusion plans would materialise sometime over the next year if not immediately, but as they have been put on hold, the wait would likely be longer.

Dollar inflows from custodian banks, however, are continuing and should limit sharp gains in the USD/INR pair beyond 60.90-60.95 levels, dealers say.

Losses in the Sensex are also aiding sentiment for the pair. The Sensex is trading down 0.5 percent.

(Reporting by Swati Bhat)