Indian rupee weakens towards record lows; yields inch up

MUMBAI: The Indian rupee weakened to 65 to the dollar in opening trade on Tuesday, not far from its record low of 65.56 reached last week, as the lower house of Parliament approved a plan worth nearly $20 billion to provide cheap grain to the poor.

The Food Security Bill is a key part of the ruling Congress party's strategy to win re-election.

The partially convertible rupee was trading at 65.21/25 per dollar at 0904 India time (0334 GMT), sharply below its close of 64.30/31 on Monday.

The benchmark 10-year bond yield dropped 4 basis points at open to 8.30 percent as the central bank announced an open market purchase of bonds but soon edged higher, tracking weakness in the rupee.