MUMBAI: The Indian rupee weakened on Tuesday as dollar bids from foreign banks, likely on behalf of custodial clients, and a softer Chinese yuan outweighed positive cues from broad weakness in the greenback.
The rupee closed at 85.6350 against the US dollar, down about 0.3% on the day.
Asian currencies were mixed on the day while the offshore Chinese yuan dipped lower after China cut key benchmark lending rates and corporate seasonal demand for dollars remained high.
A fall in local equities also weighed on the rupee, with traders pointing to dollar demand from foreign banks, likely spurred by mild outflows from local stocks.
Benchmark Indian equity indexes closed down by about 1% each on the day while the yield on the country’s benchmark 10-year bond dipped.
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