Rupee falls to 73.18 on wider trade deficit worries

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January 6, 2021 4:45 AM

The rupee fell to 73.18 on Tuesday, losing 0.2% to the dollar, the most in seven weeks amid concerns India’s trade deficit would widen further in the coming months as the economy recovers.

The currency markets also apprehend foreign flows into the equity markets could slow after record levels of buying; so far in January, however, FPIs have been big buyers.

The rupee fell to 73.18 on Tuesday, losing 0.2% to the dollar, the most in seven weeks amid concerns India’s trade deficit would widen further in the coming months as the economy recovers.

The currency markets also apprehend foreign flows into the equity markets could slow after record levels of buying; so far in January, however, FPIs have been big buyers. The yield on the benchmark remained steady at 5.82% with the markets reassured the continuing open market operations by RBI would keep the yield sub-6%.

Led by HDFC, the stocks of financials soared, sending the Bank Nifty to a one-year high and the Nifty close to 14,200. The earnings season kicks off on January 8 with TCS announcing Q3FY21 results.

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