Forex dealers said besides dollar's gains against the euro overseas, increased demand from importers for the US currency and a lower opening in the domestic equity market also put pressure on the rupee.
In New York market, the dollar fell further against the euro yesterday after minutes from the Federal Reserve's March meeting detailed risks that could keep interest rates depressed even after the first rate hike.
In New York market, the dollar fell against euro late yesterday, as European Central Bank President Mario Draghi said that central bank officials had discussed quantitative easing as an option to fight falling inflation.
In recent sessions, shares have rallied on hopes Hindu nationalist opposition leader Narendra Modi, a more business-friendly candidate, is seen coming to power on promises of economic revival and jobs.
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Fund managers will be given more flexibility to invest in corporate bonds.
The RBI also asked the oil marketing companies to smoothen their daily dollar demand so that upcoming bunched up demand was covered in advance in forward markets or on days with low dollar demand.
The RBI also asked the oil marketing companies to smoothen their daily dollar demand so that upcoming bunched up demand was covered in advance in forward markets or on days with low dollar demand.
Data showing foreign institutional investors have slowed their purchases in domestic shares further added to the weak sentiment.
India plans to launch trading of government bond futures within the next two months as part of efforts to deepen its financial markets, according to several sources involved in the discussions with the central bank.
The central bank said such loan products, popularly called 80:20 or 75:25 schemes, are likely to expose the banks as well as their home loan borrowers to additional risks.
The problems are being compounded by perceptions that India is ill suited to defend the currency in the near-term.
RBI will auction Rs 1,000 crore worth of these bonds next Tuesday.
While the country imposed limits, it also eased and simplified other restriction to attract foreign inflows. This is done to plug record current account deficit.
Says the TRC proposal was clumsily worded.
Expected cut in withholding tax for debt investments.
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